Which of the Following Observations Concerning International Loan Cross-Default Provisions

question 31

Multiple Choice

Which of the following observations concerning international loan cross-default provisions is NOT true?

• A)They ensure that if a country defaults on just one of its loans,all its other outstanding loans would automatically be put into default as well.
• B)They prevent a country from selecting a group of weak lenders for special default treatment.
• C)They make the outcome of any individual loan default decision potentially very costly for the borrower.
• D)They protect strong lenders in any loan default by guaranteeing the repayment of such defaulted loans.

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Definitions:

Private Interests

Interests or goals that are pursued by individuals or entities for their personal or organizational benefit, rather than for the public good.

Social Interests

The collective welfare or well-being of a community or society as a whole.

Pure Competition

Another term for perfect competition, where a market structure features many buyers and sellers, no barriers to entry, and homogeneous products.

Producer Surplus

The difference between the amount producers are willing to sell a good for and the actual price they receive, representing the producers' benefit.