_________ costs of borrowing increase the debt-burden.

Higher

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Medium

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Informal

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Formal

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Solution

The correct option is A Higher
Higher costs of borrowing increase the debt burden.
Informal sources of credit charges higher rates of interest
Due to higher rate of interest the informal sources of credit are generally exploitative in nature.

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Similar questions

Fill in the blanks:

(i) Majority of the credit needs of the __________households are met from informal sources.

(ii) __________costs of borrowing increase the debt-burden.

(iii) __________issues currency notes on behalf of the Central Government.

(iv) Banks charge a higher interest rate on loans than what they offer on __________.

(v) __________is an asset that the borrower owns and uses as a guarantee until the loan is repaid to the lender.

Does public debt impose a burden? Explain.

Other things remaining the same, an increase in the tax rate on corporate profit will

(a) make the debt relatively cheaper

(b) make the debt relatively the dearer

(d) we can't say

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