Which term describes aid given by one country that requires the recipient to buy goods from the donor country?

Which term describes aid given by one country that requires the recipient to buy goods from the donor country?

• A. Military aid
• B. Grant-in-aid
• C. Humanitarian aid
• D. Tied aid

Answer: (D)

This question tests the idea of aid that comes with a condition: the recipient must buy goods from the donor country. That arrangement is called tied aid. The donor uses the gift or loan with the requirement that purchases and services come from the donor nation, which helps boost the donor’s own economy. This differs from other forms of aid where there are no such purchasing requirements—like humanitarian aid, which focuses on relief without tied purchases, or grants that are given outright with no obligation to spend the money in a specific way. Military aid involves defense-related support, not necessarily a rule to buy from the donor country, so it isn’t defined by that purchasing condition. So the term that fits best is tied aid.

This question tests the idea of aid that comes with a condition: the recipient must buy goods from the donor country. That arrangement is called tied aid. The donor uses the gift or loan with the requirement that purchases and services come from the donor nation, which helps boost the donor’s own economy. This differs from other forms of aid where there are no such purchasing requirements—like humanitarian aid, which focuses on relief without tied purchases, or grants that are given outright with no obligation to spend the money in a specific way. Military aid involves defense-related support, not necessarily a rule to buy from the donor country, so it isn’t defined by that purchasing condition. So the term that fits best is tied aid.