Government Authorities Are More Likely to Allow Subsidiary Repayment of a Loan

question 53

Multiple Choice

Government authorities are more likely to allow subsidiary repayment of a loan to a large international bank than to a parent firm because

• A) stopping payment to an international bank would have a negative impact on the credit image of the country.
• B) the government is also borrowing money from that bank and wants a larger loan before they choose to default.
• C) corrupt government officials have accounts at the bank and they have made an under-the-table agreement not to withhold funds from that bank.
• D) none of the above are true.

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Definitions:

Rosenthal Effect

Also known as the Pygmalion effect, the phenomenon in which higher expectations lead to an increase in performance; a form of self-fulfilling prophecy.

Double-Masked Study

A type of clinical trial where neither the participants nor the experimenters know who is receiving a particular treatment, reducing bias.

Selection Bias

A distortion in the outcome of a study due to non-random selection of participants, leading to an unrepresentative sample.

Double-Masked

A study design in which neither the participants nor the researchers know which participants belong to the control group and which to the experimental group, to prevent bias.