Why did the debt crises of the 1980s lead to increased foreign direct investment in developing countries in the 1990s?
A) Banks in developed countries insisted on taking collateral to secure their loans.
B) Developing countries removed restrictions on FDI once their access to foreign loans dried up.
C) Developing countries refused to take out new loans themselves,leading MNCs in their countries to borrow to build new factories.
D) Banks preferred to lend money to MNCs in rich countries rather than to governments in developing countries,and these MNCs then invested in developing countries directly.
Correct Answer:
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