The allocation of country resources between present and future consumption is measured by which of the following variables of the credit scoring model of sovereign country risk exposure?

Question

Quizplus · Accepted Answer

The allocation of country resources between present and future consumption is best measured by the investment ratio, as it reflects the portion of a country's income that is being saved and invested in future production capacity. The other variables listed are not directly related to this allocation decision. The debt service ratio measures the ability to manage existing debt payments, the import ratio measures the level of imports relative to total economic activity, the variance of export revenue measures the volatility of exports, and domestic money supply growth measures the rate of money creation within the economy.

The Allocation of Country Resources Between Present and Future Consumption