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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 Trapa situation in which adebtis difficult or impossible to repay, typically because high interest payments prevent repayment of the principal. Acountry is said to be in debt trapif it has to borrow to make interest payments to on outstanding loans.

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