A Nation Often Has an Option to Default on Its

question 75

Multiple Choice

A nation often has an option to default on its sovereign debt rather than undergo painful repayment because:

• A) in every debt agreement there is an escape clause.
• B) there is no international debt court, nor would creditors gain advantage by military action against debtors.
• C) the finance ministers have the option to choose to repay or deliver commodities in lieu of payment.
• D) there are limited means by which to transfer international wealth, such as gold or domestic stocks or bonds.

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Definitions:

Behaviors

Actions or reactions of an individual, often in response to the environment, that can be observed and measured.

Electrical Communication

A process where electrical signals are used for communication between different parts of an electronic system or between neurons in the nervous system.

Chemical Communication

The transfer of information between organisms through the release and detection of chemical signals or pheromones.

Neurons

Cells within the brain and nervous system that are responsible for processing and transmitting information through electrical and chemical signals.