Why Is Borrowing Foreign Capital Controversial in the Borrowing Countries

question 11

Multiple Choice

Why is borrowing foreign capital controversial in the borrowing countries?

• A)When investment levels are high,interest groups fight over how the money should be divided and spent.
• B)The repayment of loans requires policies that reduce the incomes of those who did not directly benefit from the loans.
• C)Taxpayers in borrowing countries have to bail out their own banks.
• D)The people who bear the burden of repayment are the wealthy industrialists who borrowed the money.
• E)International investment inhibits growth in developing countries.

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