What ultimately determines a nation's ability to repay foreign loans is its ability to generate ___________.

Question

Quizplus · Accepted Answer

The ability to generate hard currencies, such as US dollars or euros, is crucial for a nation's ability to repay foreign loans. Soft currencies, such as the currencies of many developing countries, are not as widely accepted in international markets and can be subject to depreciation or inflation. Increased employment and imports can contribute to a nation's economic growth, but alone they do not necessarily determine its ability to repay foreign loans.

What Ultimately Determines a Nation's Ability to Repay Foreign Loans