Which of the Following Statements Is True of Foreign Aid

question 21

Multiple Choice

Which of the following statements is true of foreign aid?

• A) Foreign aid is only provided to sub-Saharan Africa.
• B) Foreign aid is always efficient in eradicating poverty.
• C) In some instances, foreign aid can be beneficial for dictators.
• D) The concept of foreign aid was introduced in the twenty-first century.

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Definitions:

Interest Payments

Interest payments are the amounts paid by borrowers to lenders as compensation for the use of borrowed money or assets, typically expressed as an annual percentage rate.

Compensating Balances

Compensating balances are minimum account balances that a company agrees to maintain in a bank account as part of a borrowing arrangement to offset bank service charges or qualify for better loan terms.

Cash Discount

A reduction in the invoice price offered by sellers to buyers for prompt payment of their bill, aimed at encouraging early payment.

Commercial Paper

An unsecured, short-term debt instrument issued by corporations, typically used for financing inventory and accounts receivable.