a. How would the budget deficit change in 2015 and 2016 if the Bank of Canada moved interest rates up?
b. How would the budget deficit change in 2015 and 2016 if the Bank of Canada’s monetary policy led to a rapid appreciation of the dollar?

In the 1980s, it was Argentina, Mexico, and the Philippines that struggled with unsustainable debt loads. In the 1990s, it was Russia and the go-go economies of East Asia. Today, it is the United States, Japan, and Europe.