Among the penalties that hurt countries trying to default on their loans is:
A) higher interest rates and fewer loan opportunities in the future.
B) improved trade volume.
C) higher growth in GDP.
D) lower risk premiums on loans.

Question

Quizplus · Accepted Answer

When a country defaults on its loans, it becomes a higher risk borrower for lenders. As a result, lenders demand higher interest rates and may limit the amount of loans they offer to the country in the future. This can make it difficult for the country to obtain necessary financing and can hinder economic growth. Improved trade volume, higher growth in GDP, and lower risk premiums on loans are not penalties, but rather positive outcomes that a country may experience if it successfully manages its debt.

Among the Penalties That Hurt Countries Trying to Default on Their