Problem 8 (a) What does it mean for a country to "inflate away" its debt? (Select all that apply) (i) It means that the country may repay their debt by printing additional currency, which generally leads to a rise in inflation and a sharp devaluation. 4 (ii) When "inflating away" the debt is infeasible or politically unattractive, countries may choose to default on their debt. (iii) Inflating away the debt always ends in the country filing for bankruptcy. (iv) Sovereign bond yields reflect investor expectations of inflation, currency, and de- fault risk. (b) This might be costly for investors even if the country does not default because the country may (inflate/ devalue) its currency as a result of the (economic/foreign) policy. (Circle your answers