There Is a Limit to a Nation's Ability to Use

question 110

Multiple Choice

There is a limit to a nation's ability to use international financial markets to supplement domestic consumption or investment. Why?

• A) Lenders like a diversified group of borrowers.
• B) International lenders require collateral.
• C) Communication is difficult because of language and differences in legal systems.
• D) At some point, a nation will not be able to service the rising level of external debt.

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Definitions:

Mark-up

The surplus added onto the base cost of products intended to cover operational costs and generate profit.

Unit Cost

The financial outlay required for the production, storage, or acquisition of an individual product or service unit.

Mark-up

The difference between the cost of a good or service and its selling price, expressed as a percentage of the cost.

Selling Price

The price at which a product or service is sold to customers, determining the revenue generated from sales.