The Country of Ghathan Has Been in Serious Foreign Debt

question 39

Multiple Choice

The country of Ghathan has been in serious foreign debt for quite some time. It has large amounts of debt denominated in dollars, euros, and pounds. In the given scenario, the government of Ghathan is most likely to:

• A) consider overvaluing the national currency.
• B) make its exports cheaper.
• C) reduce purchase of foreign goods.
• D) stop employment drives in the manufacturing sector.

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Definitions:

Assets

Resources owned by a business, expected to bring future economic benefits.

Liabilities

Debts or financial responsibilities that a business has to other entities, requiring repayment over a period through the exchange of economic resources such as cash, products, or services.

Owner's Equity

The residual interest in the assets of the entity after deducting liabilities, essentially representing the owner's claim against the company's assets.

Expense

The outflow of resources such as cash and other valuables, incurred in the process of generating revenues.