Take the Marshall Plan for example. The US gave 13 billion dollars to European nations to rebuild their cities. But what is meant by 13 billion dollars? Where does the money come from? Is it paid in gold? Do the countries receive the money, then buy resources with the money? What happens when enormous sums of money is lent, and then the lending country inflates or deflates their currency?
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Often such “gifts” aren’t just a pile of cold, hard cash that the nation can do anything they want with. That isn’t as politically advantageous as it would relinquish control of what that money can be spent on, and would likely be spent in ways that don’t particularly benefit the country giving it.
Instead what would often happen is the donating country would provide a certain amount of funds for use in purchasing certain kinds of products from local companies. So for example the United States might provide Ukraine with a budgeted amount of money to spend on purchasing weapons from US-based weapons manufacturers. That budget would be paid out by the US government itself, not Ukraine, so there isn’t really a bank account sitting around with that money in it (other than the US government general fund). The money would ultimately come from US taxpayers of course.
Since the country being gifted the funds isn’t directly involved it doesn’t really matter what happens to their local currency. It is much more politically palatable to do things this way as well because it can be seen as reinvesting in the local economy.
Large transfers of money between countries is digital. Instead of transferring any materials its all moved on computers.
It depends. Most easiest way is to transfer money through wire transfers from one central bank to another. But even with electronic transfers, eventually the currency or assets have to be moved physically so they can actual be used. So the governments themselves might not move assets, but their central banks eventually will.
When money is promised through specific materials or aid, sometimes money is transferred for the recipient to use only for that specific purpose. But that’s always a challenge to monitor and police. So often the giving country (if they have the means) will send the specific materials/assets physically themselves or will purchase them on behalf of the recipient country to be delivered by a third party.
It all depends on the details of the agreement concerning the transfer and other factors of international trade & law.
It depends. There’s no one answer. It can be gold, cash, or more commonly, just credit. In other words, the lender country says “we’re giving you x dollars to buy whatever you want from companies on our country on us” and then the lender country just pays the companies directly for whatever the borrowing country purchased.
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