The concept of 'Original Sin' in the literature on emerging-market debt refers to: MCQ with Answer and Explanation

The concept of 'Original Sin' in the literature on emerging-market debt refers to:
A. The historical difficulty of many countries in borrowing internationally in their own currency
B. The first occurrence of a debt default
C. Only domestic-currency debt problems
D. The sin of high public spending
Answer: Option A
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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Practice More Economy Set 1 Questions

Question #1
The 'Insurance Regulatory and Development Authority of India' is a:
A. government department
B. private regulator
C. statutory body
D. constitutional body

Correct Answer: Option C


Explanation:
IRDAI is a statutory body established under the IRDA Act, 1999.

This question belongs to: Economy GK Economy Set 1
Question #2
Total utility is maximum when marginal utility is:
A. maximum
B. negative
C. zero
D. equal to average utility

Correct Answer: Option C


Explanation:
Total utility reaches its maximum when marginal utility is zero; beyond this point, marginal utility becomes negative and total utility falls.

This question belongs to: Economy GK Economy Set 1
Question #3
Which of the following is a measure of absolute poverty commonly used in India?
A. Lorenz curve
B. Poverty line based on calorie norms and consumption expenditure
C. Relative income share of the bottom 10%
D. Gini coefficient

Correct Answer: Option B


Explanation:
India has traditionally used a poverty line based on minimum calorie requirements and corresponding consumption expenditure to measure absolute poverty.

This question belongs to: Economy GK Economy Set 1