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In the two-period model with default, if the nation defaults on its debts in the future period Question 9Answer a. there are no consequences. b.

In the two-period model with default, if the nation defaults on its debts in the future period Question 9Answer a. there are no consequences. b. the central bank must bail out the government. c. it faces a higher interest rate. d. collateral is seized. e. it bears a cost v

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