The short-term instrument issued by the government as a means of financing its cash requirements is known as a Treasury Bill (T-Bill). Here are the steps explaining this:

1. Governments often need to raise funds for various reasons, including managing their cash flow, funding their deficits, or managing their monetary policy.

2. To do this, they can issue different types of securities. These can be long-term or short-term, depending on the government's needs.

3. Short-term securities are typically issued for a period of up to one year. These are known as Treasury Bills or T-Bills.

4. T-Bills are sold at a discount to their face value. This means that investors buy them for less than their face value.

5. At maturity, the government pays the investor the face value of the T-Bill. The difference between the purchase price and the face value is the investor's return or interest.

6. Therefore, T-Bills are a way for the government to borrow money from investors with the promise to repay them in the short term (up to one year).

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The short-term instrument issued by the government as a means of financing its cash requirements is known as a Treasury Bill (T-Bill). Here are the steps explaining this:

1. Governments often need to raise funds for various reasons, including managing their cash flow, funding their deficits, or managing their monetary policy.

2. To do this, they can issue different types of securities. These can be long-term or short-term, depending on the government's needs.

3. Short-term securities are typically issued for a period of up to one year. These are known as Treasury Bills or T-Bills.

4. T-Bills are sold at a discount to their face value. This means that investors buy them for less than their face value.

5. At maturity, the government pays the investor the face value of the T-Bill. The difference between the purchase price and the face value is the investor's return or interest.

6. Therefore, T-Bills are a way for the government to borrow money from investors with the promise to repay them in the short term (up to one year).

Knowee AI · Accepted Answer

The short-term instrument issued by the government as a means of financing its cash requirements is known as a Treasury Bill (T-Bill). Here are the steps explaining this:

1. Governments often need to raise funds for various reasons, including managing their cash flow, funding their deficits, or managing their monetary policy.

2. To do this, they can issue different types of securities. These can be long-term or short-term, depending on the government's needs.

3. Short-term securities are typically issued for a period of up to one year. These are known as Treasury Bills or T-Bills.

4. T-Bills are sold at a discount to their face value. This means that investors buy them for less than their face value.

5. At maturity, the government pays the investor the face value of the T-Bill. The difference between the purchase price and the face value is the investor's return or interest.

6. Therefore, T-Bills are a way for the government to borrow money from investors with the promise to repay them in the short term (up to one year).

Which short-term (up to one year) instrument is issued by government as a means of financing it's cash requirements

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