Although a net debtor country may initially benefit from an inflow of savings from abroad, over the long run continued borrowing may result in growing dividend payments to foreigners and a drain on the debtor country's economic resources.

Question

Quizplus · Accepted Answer

This is true as a net debtor country that continues to borrow may end up with growing dividend payments to foreigners, which can lead to a drain on its economic resources in the long run.

Although a Net Debtor Country May Initially Benefit from an Inflow