How does foreign debt management improve development, Business Economics

Assignment Help:

How does foreign debt management improve development?


Borrowing is a policy to encourage growth like aid represents an injection of resources within the economy which enable investment thus growth. When borrowed resources are used to raise productive capacity, in that case the loan and interest repayments can be met by part of the raised output, leaving additional output to increase living standards and cet par.

Less developed countries have an incentive to reduce indebtedness as that decrease $ interest payments on debt and discharge of funds for investment quite than debt repayment.

FDI is extremely sensitive to international confidence. When overseas investors are uncertain about the economic stability of a nation or believe debt repayments may be frozen they will not invest. Debt management reassures overseas investors as well as raises FDI.


Related Discussions:- How does foreign debt management improve development

How does colonial background influence development process, How does coloni...

How does colonial background influence the development process? Colonial experience influences: • Language for example the official language of US is English. • Legal and

Case Study, Harvard Business Review Case Study 9-572-029 Fisher Price Toys....

Harvard Business Review Case Study 9-572-029 Fisher Price Toys... Need help with the following questions: 1. Should Fisher Toys lauch the ATV Explorer? 2. What price tag should the

What are the assumptions of lewis, What are the assumptions of Lewis? ...

What are the assumptions of Lewis? LDCs (Less Developed Countries) have two (dual) economies as: • Rural traditional economic and social practices, which overpopulated, s

Types of transaction on the capital account, Types of Transaction on the Ca...

Types of Transaction on the Capital Account are stated below: It is useful to recall the basic types of transactions recorded on the capital account: foreign portfolio investme

Ecnomics, Explain the concept of scarcity, and the role it plays in decisio...

Explain the concept of scarcity, and the role it plays in decision making

Producing the standard level products, Provisionally the new software is ca...

Provisionally the new software is called SafeCus with two projected levels of service - Premier and Standard. The Premier Level could be on sale within a year and will provide b

Railways economics, AsEvaluate the implications of implementing this ideal ...

AsEvaluate the implications of implementing this ideal product mix in Transnet Freight Rail.

Analyse the monetary policy called inflation targeting, Question 1: (a)...

Question 1: (a) "Money demand is inversely related to interest rates and is stable over time." Discuss the theoretical and empirical validity of this statement. (i) Analyse

Marginal utility and consumer behaviour, how can a community having water ...

how can a community having water shortages issues be resolved using marginal utility and consumer behaviour

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd