In 2007, Denmark's government had expenditures of $157 billion and spending of $171 billion. GDP in 2007 was $312 billion. The government ran a budget ________ and government debt ________.
A) deficit; decreased
B) deficit; increased
C) surplus; decreased
D) surplus; increased

Question

Quizplus · Accepted Answer

The government ran a budget deficit because its spending ($171 billion) exceeded its expenditures ($157 billion). When a government runs a deficit, it typically has to borrow money, which increases government debt.

In 2007, Denmark's Government Had Expenditures of $157 Billion and Spending