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Which of the following best describes the concept of Debt Service Ratio?
- a)External Debt to the GDP ratio.
- b)Proportion of the total external debt service payments to the current receipts of the Balance of Payments (BoP).
- c)The ratio of total external debt service payments to the total receipts in the Balance of Payments (BoP).
- d)The ratio of the total internal and external debt service payments to the GDP ratio.
Correct answer is option 'B'. Can you explain this answer?
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Which of the following best describes the concept of Debt Service Rati...
The Debt Service Ratio is measured by the proportion of the total external debt service payments (i.e., principal repayment plus interest payment) to the current receipts (minus official transfers) of the Balance of Payments (BoP). It indicates the claim that the servicing of the external debt makes on the current receipts and is, therefore, a measure of strain on the BoP, due to the servicing of debt service obligations.
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Which of the following best describes the concept of Debt Service Rati...
Debt Service Ratio:
Debt service ratio refers to the proportion of the total external debt service payments to the current receipts of the Balance of Payments (BoP).
Explanation:
- External Debt Service Payments: This refers to the total amount of money that a country must pay annually to service its external debt, including both principal and interest payments.
- Current Receipts of the BoP: This includes the total receipts that a country earns from its current account transactions, such as exports, imports, and remittances.
- Calculation: The debt service ratio is calculated by dividing the total external debt service payments by the current receipts of the BoP. This ratio provides an indication of a country's ability to meet its external debt obligations based on its current income.
- Significance: A high debt service ratio indicates that a country may struggle to meet its external debt obligations, which can lead to financial instability and potential default. On the other hand, a low debt service ratio indicates that a country has a strong capacity to service its external debt.
- Importance: Monitoring the debt service ratio is crucial for assessing a country's financial health and sustainability. Governments and policymakers use this ratio to make informed decisions regarding debt management, fiscal policies, and economic development strategies.
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Which of the following best describes the concept of Debt Service Ratio?a)External Debt to the GDP ratio.b)Proportion of the total external debt service payments to the current receipts of the Balance of Payments (BoP).c)The ratio of total external debt service payments to the total receipts in the Balance of Payments (BoP).d)The ratio of the total internal and external debt service payments to the GDP ratio.Correct answer is option 'B'. Can you explain this answer?
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Which of the following best describes the concept of Debt Service Ratio?a)External Debt to the GDP ratio.b)Proportion of the total external debt service payments to the current receipts of the Balance of Payments (BoP).c)The ratio of total external debt service payments to the total receipts in the Balance of Payments (BoP).d)The ratio of the total internal and external debt service payments to the GDP ratio.Correct answer is option 'B'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Which of the following best describes the concept of Debt Service Ratio?a)External Debt to the GDP ratio.b)Proportion of the total external debt service payments to the current receipts of the Balance of Payments (BoP).c)The ratio of total external debt service payments to the total receipts in the Balance of Payments (BoP).d)The ratio of the total internal and external debt service payments to the GDP ratio.Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following best describes the concept of Debt Service Ratio?a)External Debt to the GDP ratio.b)Proportion of the total external debt service payments to the current receipts of the Balance of Payments (BoP).c)The ratio of total external debt service payments to the total receipts in the Balance of Payments (BoP).d)The ratio of the total internal and external debt service payments to the GDP ratio.Correct answer is option 'B'. Can you explain this answer?.
Which of the following best describes the concept of Debt Service Ratio?a)External Debt to the GDP ratio.b)Proportion of the total external debt service payments to the current receipts of the Balance of Payments (BoP).c)The ratio of total external debt service payments to the total receipts in the Balance of Payments (BoP).d)The ratio of the total internal and external debt service payments to the GDP ratio.Correct answer is option 'B'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Which of the following best describes the concept of Debt Service Ratio?a)External Debt to the GDP ratio.b)Proportion of the total external debt service payments to the current receipts of the Balance of Payments (BoP).c)The ratio of total external debt service payments to the total receipts in the Balance of Payments (BoP).d)The ratio of the total internal and external debt service payments to the GDP ratio.Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following best describes the concept of Debt Service Ratio?a)External Debt to the GDP ratio.b)Proportion of the total external debt service payments to the current receipts of the Balance of Payments (BoP).c)The ratio of total external debt service payments to the total receipts in the Balance of Payments (BoP).d)The ratio of the total internal and external debt service payments to the GDP ratio.Correct answer is option 'B'. Can you explain this answer?.
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