Critics of Debt Relief Make All of the Following Arguments

question 15

Multiple Choice

Critics of debt relief make all of the following arguments except

• A)it would be wasted money since the conditions that caused the debt would be likely to persist.
• B)countries with large foreign debts are poorly administered.
• C)debt relief can quickly fuel a new round of borrowing that simply restores debt to prior levels.
• D)debt relief will encourage other nations to borrow excessively with the hope that their debts may be forgiven in the future.
• E)the cost of debt relief to the most severely indebted countries is too large for the high income countries to afford.

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Definitions:

Administrative Expenses

Costs related to the general operations of a company, such as salaries of non-production staff, office supplies, and utilities.

Merchandise Inventory

Goods a company holds for the purpose of resale in the normal course of business.

Product Costs

These are costs that are directly associated with the creation of a product, including direct materials, direct labor, and manufacturing overhead.

Period Costs

Expenses incurred by a business that are not directly tied to the production process and are charged to the period in which they occur.