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Why Is Borrowing Foreign Capital Controversial in the Borrowing Countries

Question 30

Multiple Choice

Why is borrowing foreign capital controversial in the borrowing countries?


A) International investment often inhibits growth in developing countries.
B) The repayment of loans may require 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 usually the wealthy industrialists who borrowed the money.

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