Discuss the motivations, beyond the temporary loss of access to future loans, that sovereign governments have to avoid defaulting on international debt.
What will be an ideal response?
POSSIBLE RESPONSE: If a debtor country has assets located in the creditor country, it should worry that these could be seized in retaliation. The debtor country can experience macroeconomic costs when defaults are linked to financial crises that disrupt the financial system and the domestic economy of the debtor country. The economy may suffer from severe recession. It may lose its ability to export and import if it loses trade financing or if new barriers are erected. The country can experience a general loss of reputation that results in loss of other benefits. Multinational corporations (MNCs) may see the default as another source of increased country risk. Consequently, spillover benefits such as technology, management practices, and marketing skills are lost.
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Members of the European Union decided to adopt a single currency by what year?
A) 2008 B) 2005 C) 1999 D) 1992
Which of the following is the best description of the effects of an increase in the supply of bread?
a. Consumers will pay more for bread. b. Bread prices will fall, and bread sales will rise. c. A permanent surplus of bread will remain on the market. d. Bakers will have higher marginal costs.
Efficiency wages
a. raise the productivity of a firm's workers, so the firm hires more workers. b. raise the productivity of a firm's workers, so the firm hires fewer workers. c. reduce the productivity of a firms' workers, so the firm hires more workers. d. reduce the productivity of a firm's workers, so the firm hires fewer workers.
The U.N.'s Millennium Poverty Goal was to reduce the global rate of extreme poverty to 15 percent by 2015, but it will not have much impact on the number of people in poverty.
Answer the following statement true (T) or false (F)