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    Question

    A country is said to be in debt trap

    if
    A It has to abide by the conditionality imposed by the International Monetary Fund Correct Answer Incorrect Answer
    B It is required to borrow money to make interest payments on outstanding loans Correct Answer Incorrect Answer
    C It has been refused loans or aid by creditors Correct Answer Incorrect Answer
    D The World Bank charges a very high rate of interest on outstanding as well as new loans Correct Answer Incorrect Answer

    Solution

    Debt Trap a situation in which a debt is difficult or impossible to repay, typically because high interest payments prevent repayment of the principal. A country is said to be in debt trap if it has to borrow to make interest payments to on outstanding loans.

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