External Debt Rises from 5 Percent of GDP to Over

question 65

Multiple Choice

External debt rises from 5 percent of GDP to over 30 percent of GDP.This increase in external debt:

• A)is not a potential problem because repayment does not imply a net reduction in the income of an average citizen.
• B)is not a potential problem because government debt differs from the debt of individuals.
• C)is a potential problem because government debt is no different from the debt of individuals.
• D)is a potential problem because repayment implies a net reduction in the income of an average citizen.

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Definitions:

BATNA

Best Alternative to a Negotiated Agreement, the most advantageous alternative course of action a party can take if negotiations fail and an agreement cannot be reached.

Resistance Point

In negotiation, the least favorable point at which a party is willing to accept a deal, beyond which they prefer to walk away.

BATNA

Best Alternative to a Negotiated Agreement; the best option one has if current negotiations fail.

Fixed-Pie Bias

The misconception in negotiations that the 'pie' or total available benefit is fixed, leading to competitive rather than cooperative strategies.