Which of the Following Is NOT a Reason Why International

question 3

Multiple Choice

Which of the following is NOT a reason why international loans are more likely to be rescheduled than international bonds?

• A)Governments appear to view the social costs of default on bonds as less critical than on loans.
• B)Many international loan contracts contain cross-default provisions that automatically put into default all loans by that country in the case of one default.
• C)Banks receive no subsidies from major governments to make international loans.
• D)Many international loan syndicates contain the same group of banks which increases the cohesiveness of loan renegotiations.

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Definitions:

Behavior

Actions, reactions, or conduct of an individual or group in response to external or internal stimuli.

Business

The practice of making one's living by engaging in commerce, trade, and services.

Attribution Errors

Mistakes made in attributing causes for one's own and others' behaviors, often leading to inaccurate judgments or assumptions.

Economic Recession

A period of temporary economic decline during which trade and industrial activities are reduced, generally identified by a fall in GDP in two successive quarters.