The government of Ugania had been extending huge amounts of loans to the business enterprises in the country.However,the borrowers failed to generate the profits necessary to repay their debts.As a result,national banks in Ugania had a lot of nonperforming assets on their books,and the Uganian currency was devalued.In this context,the business enterprises in Ugania are most likely to face a(n)_____ risk.

Question

Quizplus · Accepted Answer

The situation described in the passage suggests an economic risk for the business enterprises in Ugania. This is because the borrowers' inability to generate profits to repay their debts has resulted in nonperforming assets on banks' books and currency devaluation, which could lead to problems ranging from decreased business investment to reduced consumer demand.

The Government of Ugania Had Been Extending Huge Amounts of Loans