In the Two-Period Model with Default

question 38

Multiple Choice

In the two-period model with default

• A)there is always default.
• B)there is no default in equilibrium.
• C)private sector economic agents can default, but the nation never defaults as a whole.
• D)there is never default in the future period.
• E)the government commits to never default.

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Definitions:

Population Density

The measure of the number of individuals living in a given area, usually expressed per square kilometer or square mile.

Uncertainty Avoidance

A cultural dimension that describes the extent to which people in a society are uncomfortable with ambiguity and risk.

Individual Differences

The way in which factors such as skills, abilities, personalities, perceptions, attitudes, values, and ethics differ from one individual to another.

Consensus

A general agreement among members of a specific group or community.