Which statement describes the way war bonds raised money?

a. the government received a cash loan from the buyer; the buyer received the original amount back plus interest.
b. the government received a cash contribution from the buyer; the buyer donated money that was not returned.
c. the government paid a cash loan to the buyer; the buyer paid back the loan plus interest.
d. the government received a cash loan from the buyer; the buyer received back only the interest on the loan.

The correct answer is A.

War bonds are debt-securities issued by goverments that need funding in order to be able to economically sustain the military operations which are necessary in times of war. The person who purchases the bond is lending the amount paid (the principal) to the governemnt, in exchange for a subsequent repayment of that principal plus the corresponding interests accrued.

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