Question

A country's trade in manufactured goods diminished substantially, causing it to lose tax revenue and become a net borrower of foreign funds. For the next two decades, its government used the borrowed funds to upgrade the nation's waste-water treatment plants and to develop efficient rapid transit systems, creating substantial gainful employment for its workforce. Thereafter, the country began to quickly repay its past borrowing debt. Which of the following most strongly supported this country’s successful economic recovery?
A. ensuring borrowed funds were invested in long-term productive economic assetsB. ensuring that larger borrowing reduced the need for more private savingsC. the creation of a trade deficit through more aggressive buying of importsD. global policies of low interest rates charged on funds borrowed by governments

Answer 1

Answer: The answer is A ensuring borrowed funds were invested in long-term productive economic assets

Explanation:

Public debt otherwise known as national debt refers to the sum total of the debt owed by the government of a country both internally and externally. .In the case of this country they obtain a long term loan to reposition their economy and create gainful employment opportunities for their citizen.

This means that the country has a long term debt which resulted from the long term loan taken for financing capital project such as upgrading of the water treatment plant.and the development of efficient rapid transit system.. This investment in such project is capable of generating revenue to the government which the government can then used in the repayment of the loan.