Why Are There Conflicts of Interest Involved in International Finance

question 8

Multiple Choice

Why are there conflicts of interest involved in international finance?

• A)Borrowing countries frequently refuse to pay their debts.
• B)Lenders resent the constraints placed on them by the International Monetary Fund.
• C)Borrowers and lenders disagree over how the benefits from loans and investments should be divided.
• D)The International Monetary Fund is reluctant to manage the problems of heavily indebted countries.
• E)A flood of international capital reduces the domestic savings rate.

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Definitions:

Drawer

In the context of checks and negotiable instruments, the entity that writes and signs a check, instructing the bank to pay the stated amount to the party named on the document.

Payee

The party in a financial transaction who receives the payment.

Drawee

The party in a transaction who is directed to pay a specified amount of money, often referenced in the context of a check or draft.

Consumer Note

A debt instrument in which the buyer agrees to pay the seller a specified amount of money at a later date, often with interest.