ECONOMICS
ECONOMIC DEVELOPMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Less money to spend on development
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Increased spending on debt interest
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Increased opportunity cost
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More money to spend on development
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Detailed explanation-1: -Refinancing a mortgage to a lower interest rate is one straightforward example of debt relief. Another common form of debt relief involves debt consolidation, or the combining of several higher-interest loans into a single lower-interest loan.
Detailed explanation-2: -External debt relief refers to the reduction or forgiveness of the debt owed by developing countries to external creditors such as governments, international organizations, and private lenders.
Detailed explanation-3: -Debt relief could involve wiping the debt out altogether in bankruptcy; getting changes in your interest rate or payment schedule to lower your payments; or persuading creditors to agree to accept less than the full amount owed.
Detailed explanation-4: -These debt repayments have an opportunity cost, they might be better used in supporting development policies such as investment in health and education to boost the human capital of the population.