A country that is a net international debtor initially experiences a (an) ?
Correct answer: A. larger savings pool available to finance domestic spending
- A. larger savings pool available to finance domestic spending
- B. higher interest rate which leads to lower domestic investment
- C. loss of funds to trading partners overseas
- D. decrease in its services exports to other countries
Explanation
A net international debtor has previously received more foreign funds than it has invested abroad, so foreign capital initially enlarges the funds available for domestic spending and investment. The other options describe possible later effects, not the initial position implied by debtor status.
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