How can a developing country generate internal funds?

Question 50 options:

By outsourcing smaller operations

By selling externally to foreign countries

By setting low interest rates to encourage borrowing

By producing more than it consumes

By producing more than it consumes

Explanation:

A production surplus generates exportsthat will drive funds into the local market.

By setting low interest rates to encourage borrowing

Explanation:

A developing country is country with a less developed industrial base, they can also be said to be under developed. to generate internal funds developing countries will have to look internally i. e at its citizens to do that.

out sourcing smaller operations of the developing countries will add more economic burden on them rather than generate internal funds for them. while selling whatever they can sell which in most cases are semi finished or raw materials to Foreign countries externally will generate external funds and not internal funds for them. and producing more than it consumes will also lead to exportation of the excess which is also another means of external funds and not internal funds.

setting low interest rate will encourage borrowing from the citizens which will be paid back with the interest added to the borrowed capital this is an internal source of fund by the Government.