The problem with the strategy of achieving credibility through reputation is that
A. rules always have a lower cost than reputations in maintaining credibility.
B. reputations lack any commitment.
C. serious costs may be incurred during the period in which reputation is established.
D. reputations are rarely credible.
Answer: C
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Indicate whether the statement is true or false
If the federal government fails to reduce the nation's debt relative to income,
a. it will become easier to borrow in the global credit markets. b. the interest expenses on the outstanding debt will increase. c. the cost of holding outstanding debt will decrease. d. it will be easier to cover the interest on outstanding debt with tax revenues.
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Indicate whether the statement is true or false