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Question

_________ costs of borrowing increase the debt-burden.
  1. Higher
  2. Medium
  3. Informal
  4. Formal

A
Higher
B
Medium
C
Formal
D
Informal
Solution
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The correct option is A Higher
  • Higher costs of borrowing increase the debt burden.
  • Informal sources of credit charges higher rates of interest
  • Due to higher rate of interest the informal sources of credit are generally exploitative in nature.

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