A. Sovereign Debt Crises a. Explain how the inability to borrow in domestic currency exposes governments to runs on public debt. Recall the (national) debt accumulation equation: _3_t_ _ Btl 3t1 + GtTt = (r g) , where Bt is the real value of national debt at Y: Yti Yt1 Y: the end period t. b. How can a concern about debt default create a vicious spiral, Le, a chain of effects that policy responses might make worse? Ifthe world economic environment is r