15-35 Trading activity and investor confidence in foreign debt increased in the early 2000s.

Question

Quizplus · Accepted Answer

This statement is true. Trading activity and investor confidence in foreign debt did increase in the early 2000s, particularly in emerging market economies. This was due to factors such as improving macroeconomic fundamentals, deregulation and market-oriented reforms, and low interest rates in advanced economies, which made foreign debt more attractive to investors. However, this trend was also accompanied by increased risks and volatility, as seen in the global financial crisis of 2008.

15-35 Trading Activity and Investor Confidence in Foreign Debt Increased