What can exacerbate a debt crisis if the debtor country borrows in dollars?
A)A loss in the value of the debtor's currency relative to the dollar
B)A collapse of the floating exchange rate
C)Austerity conditions imposed by the International Monetary Fund
D)The nature of the two-level game in which domestic politics trumps repayment of loans

Question

Quizplus · Accepted Answer

A loss in the value of the debtor's currency relative to the dollar increases the local currency cost of servicing dollar-denominated debt, worsening the debt crisis.

What Can Exacerbate a Debt Crisis If the Debtor Country