Sovereign debt crises most often occur when:

Group of answer choices

Both government spending and the resulting deficits spin out of control AND speculative pressure leads to a decline in a central banks international reserves and it does not have enough foreign exchange left to service its external debt are correct.

Governments borrow to bail out troubled private entities such as banks, turning private debt into public debt.

Government spending and the resulting deficits spin out of control.

Speculative pressure leads to a decline in a central banks international reserves and it does not have enough foreign exchange left to service its external debt.