Question: 10. Watch the video*, and then answer the question below. When discussing the appropriate implementation of a fiscal consolidation, Professor Blanchard also mentions how important

 10. Watch the video*, and then answer the question below. When

10. Watch the video*, and then answer the question below. When discussing the appropriate implementation of a fiscal consolidation, Professor Blanchard also mentions how important it is for policy makers to implement some medium term plan. If they do not implement some plan, he explains how markets will "force" policy makers to act. What might we expect to observe if markets do not believe that policy makers are acting in such a way to stabilize their fiscal situation? O A. a reduction in the policy rate O B. an increase in the policy rate O C. an increase in the risk premium O D. none of the above

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