An Increase in the Default Premium

question 71

Multiple Choice

An increase in the default premium

• A) raises the safe credit market interest rate.
• B) lowers the real interest rate and firms invest more.
• C) shifts the optimal investment schedule to the left.
• D) shifts the optimal investment schedule to the right.
• E) will prevent firms from defaulting on their loans.

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Definitions:

Patent Protection

Legal rights granted to inventors to exclusively make, use, or sell their inventions for a certain period, preventing others from doing so.

Paris Convention

An international treaty established to protect industrial property rights including patents, trademarks, and industrial designs across countries.

CISG

stands for the United Nations Convention on Contracts for the International Sale of Goods, a treaty providing a uniform international sales law.

Specific Exclusions

Provisions in a contract, insurance policy, or law that explicitly remove certain events, actions, or items from coverage or regulation.