Explain "haircuts" when a government defaults its debt
What will be an ideal response?
Default is often partial and creditors take is what is known as a haircut. A haircut of 40%, for example, means that creditors receive 60% of they were owed.
You might also like to view...
Greg spends his entire budget on two goods: he plays video games at the mall arcade and he buys pizza. He discovers that his MU/P of video games is lower than his MU/P of pizza. From this, we know that he would be
a. happier eating less pizza and playing fewer video games b. happier eating less pizza and playing more video games c. happier eating more pizza and playing fewer video games d. indifferent to which selection he makes e. less happy if he made any change because he has obviously bought the quantities that maximize his total utility
Ceteris paribus, a decrease in the price of a good will cause the
a. quantity demanded of the good to decrease. b. quantity supplied of the good to increase. c. producer surplus derived from the good to decrease. d. supply of the good to decrease.