Which of the Following Is Not True for Banks in Developing

question 178

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 often make loans for extended periods because they can easily 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 becomes an obstacle to growth.
• 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:

GDP

Gross Domestic Product entails the comprehensive valuation of every good and service produced in a country over a particular period, serving as a gauge for economic performance.

Unemployment Compensation

Financial payments given to individuals who have lost their jobs without their own fault, provided by the government or other authorized bodies.

Transfer Payment

A payment made by the government to individuals, without any goods or services being received in return. This includes welfare payments, social security, and subsidies.

GDP

Gross Domestic Product, the total value of all goods and services produced over a specific time period within a country.