What does the term 'Debt Service' refer to?

Multiple choice question for Basic of Economics. Select an option, then review the explanation below.

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Payments made as interest on foreign loansRepayment installments of borrowed external fundsNeither of the aboveBoth interest payments and principal repayments on external debt

Explanation

Debt service includes both the interest payments on external debt and the repayment of the principal amount borrowed. Therefore, it encompasses both options A and B.

Practice related questions from the same subject.

1.Which of the following best describes deflation?
2.Under what condition can two nations benefit from engaging in international trade?
3.Which of the following represents a legitimate form of currency?
4.Which political ideology is best summarized by the phrase, "From each according to his ability, to each according to his needs"?
5.Which type of currency experiences a decline in its exchange rate due to a continuous balance of payments deficit?

What does the term 'Debt Service' refer to?

Explanation

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