Reference: Explanation: Type: Multiple Choice Difficulty: Easy Category: Understand72. Under what circumstances would it most likely be considered beneficial for a government to be a large borrower of foreign investment capital? A. never as there is no economic merit in a policy of running trade deficitsB. if the inflow of capital is absorbed by greater government borrowingC. when borrowing larger amounts is based on unconventional macroeconomic wisdomD. when those funds are invested in a way that sustains economic growth over timeAnswer: D
Reference: Explanation: Type: Multiple Choice Difficulty: Medium Category: Understand73. A country's trade in manufactured goods diminished substantially, causing it to lose tax revenue and become a net borrower of foreign funds. For the next two decades, its government used the borrowed funds to upgrade the nation's waste-water treatment plants and to develop efficient rapid transit systems, creating substantial gainful employment for its workforce. Thereafter, the country began to quickly repay its past borrowing debt. Which of the following most strongly supportedthis country’s successful economic recovery?
Reference: Explanation: Type: Multiple Choice Difficulty: Hard Category: Evaluate