Why Are There Conflicts of Interest Involved in International Finance

question 31

Multiple Choice

Why are there conflicts of interest involved in international finance?

• A)Borrowing countries frequently refuse to pay their debts.
• B)A flood of international capital reduces the domestic savings rate.
• 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.

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Definitions:

Sociability

The tendency to seek social interactions and exhibit enjoyment in engaging with others.

Cognitions

Mental processes involved in gaining knowledge and comprehension, including thinking, knowing, remembering, judging, and problem-solving.

Hostile Attribution

The tendency to interpret others' behaviors as having hostile intent, even when the behavior is ambiguous or benign.

Social Information-Processing

Model used to explain idiosyncratic ways of processing social information, such as use of a hostile attributional bias to interpret neutral social cues.