Question

What is the significance of improving the credit rating of a country?

• A. It increases the cost of borrowing for domestic businesses.
• B. It leads to higher inflation rates within the country.
• C. It makes it cheaper for the government to borrow from international markets.
• D. It signifies a decrease in foreign direct investment.

Answer 1

Answer:

C. It makes it cheaper for the government to borrow from international markets.

• A higher credit rating signifies a lower risk of default. This allows a country to borrow at lower interest rates from international lenders and investors.