Economics · Macroeconomics

A situation where a borrower is forced to take new loans merely to pay the interest on existing loans is known as a:

Verified Solution4 OptionsUpdated: October 2026👁️1 View

1Stagflation
2Fiscal Deficit Crisis
3Debt Trap✓
4Liquidity Trap

Correct answer

Debt Trap

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A situation where a borrower is forced to take new loans merely to pay the interest on existing loans is known as a:

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A situation where a borrower is forced to take new loans merely to pay the interest on existing loans is known as a:

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