Nations must consider the costs of default when choosing a course of action. Economists group these costs into:
A) short run and long run.
B) internal and external.
C) financial market penalties and macroeconomic costs.
D) monetary and real.

Question

Quizplus · Accepted Answer

The costs of default can be categorized into financial market penalties, such as higher interest rates and limited access to credit, and macroeconomic costs, such as decreased investment and reduced economic growth. Internal and external, monetary and real, and short run and long run are all potential ways to categorize costs, but they are not the most commonly used or widely accepted groupings.

Nations Must Consider the Costs of Default When Choosing a Course