Th4.3: ^^ Debt

Question 1

During the 1970s/80’s, developing countries received vast loans from banks in the developed world, however…

Answer 1

they now suffer from high levels of interest repayment

Question 2

What does this interest repayment mean?

Answer 2

money is flowing from developing countries back to developed countries

Question 3

What does this debt do to developing countries?

Answer 3

they have less money to spend on services for their population and may need to raise taxes, limiting growth and development

Question 4

Borrowing for growth makes sense, so when do problems occur?

Answer 4

when governments take on too much debt and do not spend it well