Which of the following resulted in a surge in international lending to developing countries in the mid-1970s to early 1980s?
A)Oil-exporting countries had a low short-run propensity to save out of their extra income.
B)The real interest rates in the industrial countries were significantly high.
C)The governments of the developing countries encouraged foreign direct investment (FDI) and foreign institutional investments (FII).
D)Lending to developing countries gained momentum through "herding" behavior.

Question

Quizplus · Accepted Answer

Lending to developing countries gained momentum through "herding" behavior as banks followed each other in lending to these countries, often without thorough risk assessment.

Which of the Following Resulted in a Surge in International