Consider again the economy described in Problem 14 Under which of the following scenarios would you expect the impact of the mineral discovery on bond yields to be larger Before the discovery, the government was heavily indebted with a crippling debt service burden or, Before the discovery, the gov...

The impact would be larger in the case of a heavily indebted government especially if the debt ...

Consider again the economy described in Problem 14. Under which of the following scenarios would you expect

Question:

Consider again the economy described in Problem 14. Under which of the following scenarios would you expect the impact of the mineral discovery on bond yields to be larger?

Before the discovery, the government was heavily indebted with a crippling debt-service burden or,
Before the discovery, the government had a very low debt burden. Explain your choice.