Which of the following factors in credit analysis is more important for general obligation non-sovereign government debt than for sovereign debt?
A) Per capita income
B) Power to levy and collect taxes
C) Requirement to balance an operating budget

Question

Quizplus · Accepted Answer

The requirement to balance an operating budget is more important for general obligation non-sovereign government debt because these entities typically do not have the power to print money or manipulate monetary policy like a sovereign government. As a result, they must rely on tax revenues and other sources of income to cover their expenses, which makes their ability to balance their budget a crucial factor in their creditworthiness. Per capita income and the power to levy and collect taxes are also important factors in credit analysis for both sovereign and non-sovereign government debt.

Which of the Following Factors in Credit Analysis Is More