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.

---

Definitions:

Oligopolist

A firm or company that operates in an oligopoly, a market structure characterized by a small number of large companies dominating the industry.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded by consumers at those prices.

Price Changes

Variations in the cost of goods and services over time, reflecting factors such as supply and demand, market competition, and inflation.

Mutual Interdependence

A situation in an oligopolistic market structure where companies depend on each other's actions and decisions to determine their own strategies.