Which of the following is not a potential problem faced by developing nations that borrow from abroad?
A) Interest payments on the debt obligations are transfers from domestic residents to foreign residents.
B) Funds obtained from foreign borrowing are often used to finance acquisitions of capital resources.
C) Foreign borrowers may place conditions on loans that effectively transfer some control over resource-allocation decisions away from domestic residents.
D) Foreign shorter-term investment and loans can be highly volatile.

Question

Quizplus · Accepted Answer

This statement is not a potential problem faced by developing nations that borrow from abroad. In fact, obtaining funds from foreign borrowing to finance acquisitions of capital resources can be a positive factor for economic growth and development. The other options (A, C, and D) are all potential problems that can arise from foreign borrowing.

Which of the Following Is Not a Potential Problem Faced