Which of the Following Statements About Debt Is False

question 59

Multiple Choice

Which of the following statements about debt is false?
I.Interest payments reduce the scope for waste by management.
II.Debt creates the possibility of bankruptcy.
III.Debt increases the tendency of shareholders to take gambles.
IV.Debt reduces the cash flows that go to government.

• A) I
• B) II
• C) III
• D) IV
• E) None of the statements are false.

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Definitions:

Donor Countries

Nations that provide financial or material aid to other countries for development, relief efforts, or economic assistance.

International Loans

Loans that are made across national borders, often involving different currencies and international financial institutions.

Living Standard

The quality and quantity of goods and services available to individuals or societies, including health, comfort, and leisure time activities.

Self-Supporting

Having the ability to provide for oneself without relying on external assistance.