Asked by Abigail Bailey on May 25, 2024
Verified
Which of the following is not true for banks in developing countries?
A) Banks are often viewed with suspicion.
B) Many bank depositors withdraw their funds at the first sign of economic problems.
C) Banks cannot make loans for extended periods because they cannot rely on a continuous supply of deposits.
D) If financial institutions fail to serve as intermediaries between savers and borrowers,the lack of funds for investment will make growth rates double.
E) The credit provided by banks as a percentage of total output is one-fifth of that in high-income countries.
Banks
Institutions licensed to receive deposits, offer loans, and provide various financial services to individuals and businesses.
Economic Problems
Issues affecting an economy, including inflation, unemployment, and poverty.
Financial Institutions
Financial institutions are organizations that provide financial services, including banks, credit unions, insurance companies, and investment firms, facilitating the flow of funds and financial transactions.
- Understand the function of banking and financial institutions in promoting economic growth.
Verified Answer
KZ
Krystal ZhangMay 31, 2024
Final Answer :
D
Explanation :
The incorrect statement is D because if financial institutions fail to serve as intermediaries effectively, it would hinder, not double, growth rates by limiting the availability of funds for investment.
Learning Objectives
- Understand the function of banking and financial institutions in promoting economic growth.