Asked by Kathryn Turner on Jun 10, 2024
Verified
Capital flight refers to the fact that many DVCs must use their export earnings to pay interest on their outstanding external debts.
Capital Flight
The transfer of savings from developing countries to industrially advanced countries to avoid government expropriation, taxation, or higher rates of inflation, or simply to realize greater returns on financial investments.
Export Earnings
The revenue a country or business receives from selling goods and services to other countries.
External Debts
These are funds borrowed by one country from foreign lenders, including private banks, governments or international financial institutions.
- Analyze the effectiveness of international commerce and investment strategies in fostering economic progress.
Verified Answer
SC
Shakira CarterJun 13, 2024
Final Answer :
False
Explanation :
Capital flight refers to the rapid outflow of capital from a country, often due to economic instability or the expectation of political turmoil, rather than the use of export earnings to pay interest on external debts.
Learning Objectives
- Analyze the effectiveness of international commerce and investment strategies in fostering economic progress.