The 1998 default by the Russian government had results that were predictable using the textbook model.The default
A)increased Russian interest rates and net exports.
B)reduced Russian interest rates and net exports.
C)increased Russian interest rates and reduced Russian net exports.
D)reduced Russian interest rates and increased Russian net exports.

Question

Quizplus · Accepted Answer

The default increased Russian interest rates due to higher risk premiums and increased net exports as the ruble depreciated, making Russian goods cheaper abroad.

The 1998 Default by the Russian Government Had Results That