A 'debt trap' arises when

the government repays all its debtCorrect answerYour answerhouseholds stop savingCorrect answerYour answerexports exceed importsCorrect answerYour answerthe government borrows mainly to pay interest on its past loansCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer D

Correct answer: D

Borrowing to pay interest raises debt, which raises interest, and the cycle feeds itself.

Concept: Debt trap
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsWhat deficits do

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A 'debt trap' arises when

Explanation