In the Context of Developing Countries' External Debt, the "Debt

question 7

Multiple Choice

In the context of developing countries' external debt, the "debt service ratio" of a country Is the ratio of annual interest payments on the debt plus scheduled repayment of the debt (amortization) to the country's __________.

• A) exports of goods and services
• B) exports of services
• C) gross domestic product
• D) total external debt

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Definitions:

Straight-Line Method

A method of allocating the cost of an asset evenly across its useful life for accounting and depreciation purposes.

Completed-Contract Method

An accounting method where revenue and expenses are recorded only when a contract is completed, used primarily for long-term projects.

Percentage-Of-Completion Method

An accounting technique that recognizes revenue and expenses related to long-term projects as a percentage of the work completed during the period.

Cumulative Pretax Income

The total pre-tax income earned by a company over a specified period, before any taxes are deducted.