A Possible Reason for the High Systematic Risk of the Debt

question 58

Multiple Choice

A possible reason for the high systematic risk of the debt service ratio (DSR) in LDCs and EMs is

• A)the tendency of world commodity prices to reflect non-similar economic conditions.
• B)the sensitivity of this ratio to rising nominal and real interest rates in the developed,or lending,countries.
• C)the tendency of prices and world demands for commodities to reflect simultaneously economic conditions.
• D)the discretionary nature of money supply growth for LDC governments.

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Definitions:

Criminal Law

A system of law concerned with the punishment of those who commit crimes.

Social Conduct

The behavior of individuals in a society, governed by social norms, customs, and laws.

Rule of Law

The principle that all members of a society, including those in government, are equally subject to publicly disclosed legal codes and processes.

Fairness

The quality of making judgments that are free from discrimination, bias, or favoritism, ensuring equal treatment for all.