Consider the model of sovereign debt and default as discussed in lectures. An increase in the lending rate leads to Select one: a. a decrease in the default probability. b. an increase in the default probability. c. inward shift of the consumption after repayment line (Y - (1+rL)L). d. inward rotation of the consumption after default line (Y - cY). Clear my choice
Consider the model of sovereign debt and default as discussed in lectures. An increase in the lending rate leads to Select one: a. a decrease in the default probability. b. an increase in the default probability. c. inward shift of the consumption after repayment line (Y - (1+rL)L). d. inward rotation of the consumption after default line (Y - cY). Clear my choice
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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