What are the two most common reasons for a sovereign debt crisis?
What will be an ideal response?
Chronic government budget deficits that eventually result in the interest payments required on government bonds taking up an unsustainably large fraction of government spending, or a severe recession that increases government spending and reduces tax revenues, resulting in soaring budget deficits.
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The current price of canvas messenger bags is $36 each and sales of the bags equal 400 per week. If the price elasticity of demand is -2.5 and the price changes to $44, how many messenger bags will be sold per week? Use the midpoint formula
What will be an ideal response?
Wanda quit her job because she was unhappy at work. Arnold was fired from his landscaping job because his company was downsizing. Who is eligible for unemployment insurance benefits?
a. both Wanda and Arnold b. Wanda but not Arnold c. Arnold but not Wanda d. neither Wanda nor Arnold
Suppose product price is fixed at $24; MR = MC at Q = 200; AFC = $6; AVC = $16. What do you advise this firm to do?
A. Increase output. B. Decrease output. C. Stay at the current output; the firm is losing $200. D. Stay at the current output; the firm is earning a profit of $400.
A firm produces and sells two goods, A and B. Good A is known to have many close substitutes; good B makes up a significant portion of most families' budgets. A price increase for each good would most likely cause total revenues for good A to:
A. increase, and total revenues for good B to increase. B. increase, and total revenues for good B to decrease. C. decrease, and total revenues for good B to decrease. D. decrease, and total revenues for good B to increase.