please answer these:
STATEMENT 1: a rise in risk premium will cause
STATEMENT 2: if the govt is running a budget deficit and private saving is less than investment, the country must be running a
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SOLUTION 1
A risk premium is the additional return an investor expects to earn for taking on more risk compared to a risk-free investment
such as a government bond. It represents the compensation for the uncertainty and potential loss of capital associated with riskier investments.
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