International borrowing and lending may be interpreted as one form of
A) unrequited international transfers.
B) aid to offset trade advantages.
C) intertemporal trade.
D) intermediate trade.
E) trade in services.

Question

Quizplus · Accepted Answer

International borrowing and lending involve intertemporal trade, which refers to exchanging goods or services between different time periods rather than at the same time. Lenders provide funds in the present with the expectation of being repaid with interest in the future, while borrowers use the funds to finance investment or consumption with the aim of generating higher returns or increasing future income.

International Borrowing and Lending May Be Interpreted as One Form