Question

At the beginning 2010, the government of Norway had no debt and held $180 billion dollars in its sovereign fund. To stimulate its economy during 2011, Norway's government plans to spend $35 billion more than it will collect in tax revenue and in 2012, its spending will exceed tax revenues by $25 billion. What will the total government debt equal at the end of 2012?

Answer 1

$0

Step-by-step explanation:

Norway's national debt is the sum of all its previous government surpluses and deficits. Until 2010, Norway had a $180 billion surplus, and even after having two consecutive deficits (government spends more than its total revenue), the account will still be positive: $180 billion - $35 billion (2011) - $25 billion (2012) = $120 billion.

We can analyze national debt as our personal finances; if we have saved a lot of money in the bank we can afford to buy some extra things without having to use our credit card. But if we don't have enough money in the bank, if we want to buy a new car then we will need a car loan.

Answer 2

$0

Step-by-step explanation:

A government deficit is when government spending exceeds its income from taxes. In 2011, government deficit will be $35 billion and $25 billion in 2012.

Government debt is the total amount a government owes its creditors. Government debt includes loans and bonds.

At the beginning of 2010, government debt was $0 and it won't change by 2012.

I hope my answer helps you.