Which of the Following Is a Factor Limiting Saving in DVCs

question 103

Multiple Choice

Which of the following is a factor limiting saving in DVCs?

• A) the lack of foreign aid and loans from the World Bank
• B) Governments control the banking system and set low interest rates.
• C) the flight of private savings to investments in IACs, where there is less risk
• D) Those who do save make their savings available only to their families, who use it for consumption.

---

Definitions:

Private Sector

Refers to the part of the economy that is owned, operated, and funded by private individuals or companies, as opposed to the government.

Majority Voting

A decision-making process where the option that receives the most votes from participants wins, often used in elections and organizational decisions.

Negative Externalities

Costs incurred by third parties not directly involved in an economic activity, for example, pollution affecting non-participating individuals.

Economically Inefficient Outcomes

Situations where resources are not allocated optimally, resulting in lost potential utility or value.