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

Can comparative benefit change over time, Can comparative benefit change ov...

Can comparative benefit change over time? Comparative benefit is a dynamic concept. A country can obtain or lose comparative advantage overtime when there is a change within r

Multiplier, How static multiplier can be shown diagramatcally

How static multiplier can be shown diagramatcally

Supply, abnormal supply curve

abnormal supply curve

What are the critics of advocates of world bank, What are the critics of ad...

What are the critics of advocates of World Bank in promotion of development? Critics of the World Bank argue: • A one-size-fits all strategy which does not take account

Analyse the transmission mechanism, Question: (a) State whether the fol...

Question: (a) State whether the following statements are TRUE or FALSE. Justify briefly your answer. (i) Money is the most liquid medium to store value. (ii) An increa

What are the causes of inflation in an economy, QUESTION (a) What are t...

QUESTION (a) What are the causes of inflation in an economy? (b) Discuss the policy implications that the central bank will implement if there is excess liquidity in the mar

Franchise, How can franchises ensure their products are appropriate for int...

How can franchises ensure their products are appropriate for international markets?

Production, The factors that affect the volume of production in economics

The factors that affect the volume of production in economics

Decentrilization, how to decentralization aids in citizen mobility

how to decentralization aids in citizen mobility

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