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Why Is Borrowing Foreign Capital Controversial in the Borrowing Countries

Question 32

Multiple Choice

Why is borrowing foreign capital controversial in the borrowing countries?


A) When investment levels are high,interest groups fight over how the money should be divided and spent.
B) The repayment of loans requires policies that reduce the incomes of those who did not directly benefit from the loans.
C) Taxpayers in borrowing countries have to bail out their own banks.
D) The people who bear the burden of repayment are the wealthy industrialists who borrowed the money.
E) International investment inhibits growth in developing countries.

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