Which of the statements below is not a reason for the high level of lending to less developed countries in the 1970s?
A) Most countries borrow large amounts of money in the initial stages of development.
B) The world real interest rate was high in the 1970s.
C) In a growing developing economy, investment opportunities exceed the domestic population's capacity to save.
D) The OPEC price increases caused consumers in non-oil-exporting LDCs to reduce their savings.

Question

Quizplus · Accepted Answer

The high level of lending to less developed countries in the 1970s was mainly due to countries borrowing large amounts of money in the initial stages of development, investment opportunities exceeding domestic savings, and the OPEC price increases leading to reduced savings in non-oil-exporting LDCs. The world real interest rates being high in the 1970s was not a primary reason for the high level of lending to less developed countries.

Which of the Statements Below Is Not a Reason for the High