CAIE A-Level Economics 11.5.5 External debt

CAIE A-Level Economics 11.5.5 External debt
Cambridge International AS & A Level Economics 9708 syllabus for exams in 2026, 2027 and 20282026–2028

Practise evaluating external borrowing as a development strategy, using debt-to-GNI data and long-run growth arguments.

How this is tested

  • interpret external debt as a percentage of GNI to judge changes in the debt burden
  • evaluate borrowing for growth using interest costs, investment use and repayment risk

Question 5

[Maximum number: 20]

Between 2010 and 2020, very low interest rates encouraged low-income countries to borrow money from foreign investors and governments to finance long-term economic growth.

Evaluate this approach to promoting long-term economic growth.