A country is said to be a debt trap if :

(a) it has to borrow to make interest payments on outstanding loans

(b) it has to borrow to make interest payments on to standing loans

(c) it has been refused loans or aid by creditors abroad

(d) the World Bank charges a very high rate of interest on outstanding as well as new loans


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(a) Debt Trap is a situation where you add on a new debt in order to repay an existing debt.

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