Question

Distinguish between Voluntary debt and compulsory debt.

Distinguish between voluntary and compulsory loans.

Answer 1

Voluntary and compulsory debt: When the government raises public debt without putting any compulsion on the buyers of government bonds, it is called voluntary debt. The chief advantage of a voluntary debt, as compared to a tax is that different lenders are free, and according to their inclinations can subscribe as much as possible. Most of the public debts are voluntary in nature. On the other hand, if the lenders purchase governments bonds under compulsion, it is called compulsory
debt. In this case, the loan must be compulsorily subscribed on the same basis as a tax.

Answer 2

Voluntary loan	Compulsory loan
When the government borrows by issuing securities, it is called voluntary debt.	when the government takes loans from the people forcibly, it is called compulsory debt.
Voluntary loans is a debt which the government earns from the general public on voluntary basis	Compulsory loans are those loans which are forcibly taken from the general public by the government of the country.