If the World Bank Makes Loans to Nations That Can

question 69

Multiple Choice

If the World Bank makes loans to nations that can attract private funds

• A) the increase in growth in that nation will spill over to other nations that are developing.
• B) these loans will interfere in the private market for capital goods and can lead to inefficient investment.
• C) the World Bank's loans will crowd out the private funds made to developing nations to encourage economic growth.
• D) the presence of the World Bank's loans will lead to even more private funds being attracted to that country.

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Definitions:

Geographic Distance

Reflects the physical space between two points on the earth, often impacting economic, social, and political interactions.

Nonequity Modes

International business arrangements that do not involve the exchange of ownership shares, such as licensing agreements and management contracts.

Equity Modes

Methods or strategies employed in acquiring ownership or stakes in companies.

Liability of Foreignness

The additional costs and risks that firms operating in a foreign country incur, compared to domestic firms.