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    Principles of Macroeconomics Study Set 2
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    Exam 19: A Macroeconomic Theory of the Open Economy
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    If a County Becomes More Likely to Default on Its
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If a County Becomes More Likely to Default on Its

Question 23

Question 23

Essay

If a county becomes more likely to default on its bonds, what happens to that country's interest rate and exchange rate? Explain.

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A higher probability of default leads to...

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