What are the likely effects of a sovereign debt crisis in terms of the government's ability to finance its debt?
What will be an ideal response?
If the government defaults, it may not be able to issue bonds for a period of time. If it does not default, it will probably have to pay higher rates of interest for a period of time.
You might also like to view...
If a nation's population grows, then
A) growth in real GDP per person will be less than the growth of real GDP. B) there can be no economic growth. C) growth in real GDP per person will be greater than the growth of real GDP. D) there must be an increase in real GDP per person.
Suppose that accountants increase the price for calculating income taxes owed by 20 percent. The short-run demand for their service is less elastic than the long-run demand because in the long run consumers will ________
A) spend less on this service B) experience an increase in income C) try to avoid paying their income tax D) find other ways to calculate the income tax they must pay