Which of the Following Is Not True for Banks in Developing

question 13

Multiple Choice

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.

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Definitions:

Common Stock

A type of equity security representing ownership in a corporation, with holders typically having voting rights and receiving dividends.

Historical Rate

A reference to the exchange rate used in translating foreign currency amounts into the reporting currency for financial statements at a specific past date.

Temporal Method

A method of foreign currency translation that uses exchange rates based on the timing of the original transaction.

Property, Plant & Equipment

Long-term tangible assets used in the operation of a business that are not intended for sale, such as machinery and buildings.