Question

Sometimes development aid goes toward disaster relief. For​ example, after the Indian Ocean tsunami of​ 2004, non-governmental organizations helped devastated countries to rebuild. Based on your understanding of the​ chapter, which of the following statements are true of foreign​ aid?

Answer 1

Sometimes development aid goes toward disaster relief. For​ example, after the Indian Ocean tsunami of​ 2004, non-governmental organizations helped devastated countries to rebuild.

Based on your understanding of the​ chapter, which of the following statements are true of foreign​ aid? ​(Select all that​ apply).

A. Foreign aid is inefficient when it is given directly to an extractive government.

B. Foreign aid is efficient when it is directly used to rebuild capital and promote growth in an economy.

C. Foreign aid is efficient when it is given directly to an extractive government.

D. Foreign aid is inefficient when it is directly used to rebuild capital and promote growth in an economy.

Answer:

Option A & B is correct

Explanation:

- corruption within the government affects the proper use of aids for that which it's designated for( diversion of funds to personal accounts of government officials in charge e.g mobutu of Zaire.)

Foreign aid is a powerful tool which can be used to mediate failure of market mechanism and boost economic growth by facilitating productive investment in key areas of the economy.