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Answer: The default by a sovereign nation has a negative impact on the GDP growth and the country's credit rating for many years.
## Explanation **D is correct** because a sovereign default has severe and long-lasting negative consequences: - Negative impact on GDP growth for many years - Damage to the country's credit rating for an extended period - Makes the banking system more vulnerable - Hurts export capabilities **A is incorrect** because sovereign default actually hurts, not enhances, exports due to reduced international confidence and trade financing. **B is incorrect** because the overall economy exhibits a downward trend, not upward, following a sovereign default. **C is incorrect** because sovereign default typically leads to political instability as people lose confidence in their leaders and government.
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What is the impact of a sovereign nation default on its economy?
A
The default by a sovereign nation will enhance export.
B
The overall economic will exhibit an upward trend if a sovereign nation defaults.
C
The default by a sovereign nation will lead to political stability.
D
The default by a sovereign nation has a negative impact on the GDP growth and the country's credit rating for many years.
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