Debt Service

question 21

Multiple Choice

Debt service

• A)is rarely an issue for high-income countries.
• B)always makes a country worse off for having borrowed.
• C)is a problem when the amount of debt is small relative to the size of the economy.
• D)tends to benefit low- and middle-income countries at the expense of high-income countries.

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Definitions:

Interest Revenue

Income earned on investments, such as loans and securities, over a period.

Operating Income

Revenue from business operations after deducting operating expenses, but before interest and taxes.

Cost Method

An accounting method used to value certain investments at their original purchase cost, without adjusting for market fluctuations.

Recognizes Dividends

The process by which a company records the payment of dividends to its shareholders in its financial statements.