What Would Happen If a Country Defaulted on Its Sovereign

question 149

Multiple Choice

What would happen if a country defaulted on its sovereign debt?

• A) It could lead to a deep recession-the effects of which might spill over into other countries.
• B) It is impossible for a country to default on its debt.
• C) Nothing,because other countries would step in to rescue the country.
• D) The country and all its property would be sold in the international marketplace to the highest bidder in an effort to repay creditors.
• E) All the assets of the country's citizens would be confiscated and sold to repay creditors.

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Definitions:

Income Growth

An increase in an individual's or economy's income or earnings over time.

Perpetual Payment

A series of payments that continue indefinitely, often used in the context of perpetuities in finance.

Effective Yield

The actual return on an investment, accounting for compounding interest or reinvestments.

Mortality Rates

The frequency of deaths in a given population during a specific period, often expressed per 1,000 or 100,000 individuals annually.