Problem 1: A nation's government issues sovereign debt to borrow money. Other names for sovereign debt include public debt, national debt, and government debt.
Governments borrow money for a variety of reasons, including increasing employment and financing public investments.
Businesses and residents' savings habits, as well as the demand from foreign investors, will also be reflected in a nation's sovereign debt level and interest rates.
Problem 2: What are the Unique Features of Sovereign Debt?