Country X Has a Significant Amount of External Debt

question 6

Multiple Choice

Country X has a significant amount of external debt.Which of the following is the most likely cause?

• A) The government of Country X borrowed money from local banks.
• B) The government of Country X borrowed money from other governments.
• C) The government of Country X spent more than it collected in revenues.
• D) The government of Country X received short-term credits from selling bonds.

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Definitions:

Elasticity

A measure of how much the quantity demanded or supplied of a good responds to a change in price, income, or other related factors.

Price Ranges

The spread between the lowest and highest price at which a good or service is sold in a market.

Price Elasticity

A calculation that shows the impact of price changes on the quantity of a good that is demanded.

Price Increase

A rise in the cost of goods or services, affecting the purchasing power of consumers.