The concept of 'Original Sin' in the literature on emerging-market debt refers to:
A. Only domestic-currency debt problems
B. The sin of high public spending
C. The first occurrence of a debt default
D. The historical difficulty of many countries in borrowing internationally in their own currency
Answer: Option D
Solution (By JKSSB Mock Tests)
Original sin denotes the inability of most emerging-market and developing countries to borrow abroad in their own currencies, forcing them to issue foreign-currency debt and creating currency mismatches.
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