Why Did the Debt Crises of the 1980s Lead to Increased

question 15

Multiple Choice

Why did the debt crises of the 1980s lead to increased foreign direct investment in developing countries in the 1990s?

• A)Banks in developed countries insisted on taking collateral to secure their loans.
• B)Developing countries removed restrictions on FDI once their access to foreign loans dried up.
• C)Developing countries refused to take out new loans themselves,leading MNCs in their countries to borrow to build new factories.
• D)Banks preferred to lend money to MNCs in rich countries rather than to governments in developing countries,and these MNCs then invested in developing countries directly.

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Definitions:

Mortgage Interest

The interest charged on a loan used to purchase a residence, which can be deductible for taxpayers who itemize deductions on their income tax returns.

Property Taxes

Taxes assessed on real estate by local government, based on the property's assessed value.

Depreciation

The accounting method of allocating the cost of a tangible asset over its useful life, reflecting wear and tear or obsolescence.

Maintenance

The routine tasks and repairs conducted to keep equipment, buildings, or machinery in working order and prevent its deterioration.