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Credit situations

A farmer took...

Question

A farmer took a loan for agriculture, but unfortunately could not repay the loan. So, the farmer took another loan to repay the previous loan. What is this condition called?

A

Debt cycle

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B

Debt trap

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C

Debt load

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D

Debt of debt

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Solution

The correct option is B Debt trap
Sometimes when a person cannot repay a loan, they tend to take another loan to repay the previous one. This vicious cycle is known as a debt trap. Most farmers and poor people are victims of this situation.

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