Final answer:
A large international debt can lead to decreased foreign exchange for imports and make it harder for a nation to manage its debt burden, potentially resulting in economic troubles and recessions.
Step-by-step explanation:
According to the text, a large international debt may result in decreased levels of foreign exchange available for importing components for local assembly. When a country has a significant trade deficit and borrows heavily, as seen in Latin American and African nations, it may not lead to increased productivity, and can result in struggles with repaying the borrowed funds. In addition, an increase in a country’s debt often means that higher interest rates could be imposed on businesses seeking loans, due to competition for financial resources with the government. Furthermore, foreign investors may hesitate to invest or might begin to withdraw investments, leading to a potential collapse of the banking system and a deep recession. These challenges include making it difficult to manage the debt burden, especially if global markets reduce the value of a country's goods.