An Emerging Economy as a Current GDP of $100 Billion

question 126

Multiple Choice

An emerging economy as a current GDP of $100 billion. It borrows $20 billion at a real interest rate of 5%, which it will repay next year. The costs of default are 25% of GDP. At the GDP level of $110 billion, what will be the country's consumption if it repays the loan?

• A) $75 billion
• B) $82.5 billion
• C) $89 billion
• D) $110 billion

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Definitions:

Sources Of Conflict

These are underlying reasons or conditions that lead to disagreement or contention between individuals or groups.

Resolve

The determination to do something or solve a problem; also refers to the act of finding solutions to issues or conflicts.

Theories Of Conflict

A set of principles or models aimed at understanding the sources, dynamics, and resolutions of conflict in various contexts.

Advantages

Benefits or favorable factors that enhance effectiveness, efficiency, or competitive position.