Inflation Can Reduce the Burden of Debt for a Sovereign

question 19

Multiple Choice

Inflation can reduce the burden of debt for a sovereign borrower because

• A) High inflation reduces interest payments on existing debt
• B) High inflation makes issuing new debt cheaper
• C) High inflation raises the nominal value of tax revenues and GDP without raising the value of existing debt
• D) High inflation causes foreign currency debt to fall in value in local currency terms
• E) High inflation reduces the nominal value of existing debt.

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Definitions:

Definitions of Persuasion

Descriptions or explanations regarding the process of influencing someone's beliefs, attitudes, intentions, motivations, or behaviors.

Common Misconceptions

Widely held but incorrect beliefs or ideas.

Successful Team Presentations

Group presentations that effectively communicate the intended message, achieve the desired impact on the audience, and demonstrate cohesive teamwork.

Handling Questions

The technique of effectively responding to queries posed by others in various contexts, such as interviews or presentations.