Which of the following effects is not common in both internal and external debts in India but is comparatively more severe in the case of external debt?

Interest payments are made till loans are paid off

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Increase in the growth of interest payments

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Loans have to be paid after certain fixed time periods

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Reduction in purchasing power of entire group

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Open in App

Solution

The correct option is D
Reduction in purchasing power of entire group

External debt results in reduction in the purchasing power which could be used for consumption and investment purposes. It puts a heavy strain on the country’s balance of payments due to a loss of foreign currencies.

Suggest Corrections

Similar questions

Loans which have to be paid after certain fixed time periods and whose interest payments are to be made regularly till the loans are finally paid off are called

When the instalment paid in respect of a fixed asset acquired on deferred payment basis includes both interest and loan, the interest element is classified under _________ activities.

When the instalment paid in respect of a fixed asset acquired on deferred payment basis includes both interest and loan, the interest element is classified under financing activities & and the loan element is classified under ___ activities.

All partners wishes to dissolve the firm. Yuastin, a partner wants that her loan of Rs. 2,00,000 must be paid off before the payments of capitals to the partners. But, Amart, another partner wants that the capitals must be paid before the payments of Yastin's loan. You are required to settle the conflict giving reasons.

All partners wish to dissolve the firm. Yastin, a partner wants that her loan of Rs 2,00,000 must be paid off before the payment of capitals to the partners. But, Amart, another partner wants that the capitals must be paid before the payment of Yastin’s loan. You are required to settle the conflict giving reasons.

Join BYJU'S Learning Program

Which of the following effects is not common in both internal and external debts in India but is comparatively more severe in the case of external debt?

The correct option is D Reduction in purchasing power of entire group External debt results in reduction in the purchasing power which could be used for consumption and investment purposes. It puts a heavy strain on the country’s balance of payments due to a loss of foreign currencies.

The correct option is D
Reduction in purchasing power of entire group

External debt results in reduction in the purchasing power which could be used for consumption and investment purposes. It puts a heavy strain on the country’s balance of payments due to a loss of foreign currencies.