Statement I.We are borrowing from abroad to finance our consumption habits.
Statement II.In the 19^th century we borrowed from abroad to finance capital expansion.

Question

Statement I.We are borrowing from abroad to finance our consumption habits. Statement II.In the 19^th century we borrowed from abroad to finance capital expansion.

Quizplus · Accepted Answer

Both statements reflect common economic practices. Statement I refers to the modern trend of countries borrowing from abroad to support their consumption levels, often leading to significant current account deficits. Statement II is historically accurate as well; in the 19th and early 20th centuries, many countries borrowed from more developed nations to finance infrastructure and industrial projects, which is a form of capital expansion.