Th4.3: ^^ Debt Flashcards
1
Q
During the 1970s/80’s, developing countries received vast loans from banks in the developed world, however…
A
they now suffer from high levels of interest repayment
2
Q
What does this interest repayment mean?
A
money is flowing from developing countries back to developed countries
3
Q
What does this debt do to developing countries?
A
they have less money to spend on services for their population and may need to raise taxes, limiting growth and development
4
Q
Borrowing for growth makes sense, so when do problems occur?
A
when governments take on too much debt and do not spend it well
