'Debt-trap' refers to a situation where
Answer & Solution
Correct answer: A.
1. Debt-trap: inability to repay a loan forces fresh borrowing.
2. New loans go toward servicing old debt rather than productive use.
3. High-interest informal lenders are notorious for trapping borrowers this way.
_Source: NCERT Class 10 Understanding Economic Development, Ch 3 "Money and Credit"_
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