What Is the Main Problem with Government Guarantees That Socialize

question 247

Multiple Choice

What is the main problem with government guarantees that socialize losses and privatize gains?

• A) They encourage overly risky investments by insulating private investors from any losses.
• B) The investments that do occur never generate production of goods underproduced by the private sector.
• C) They discourage private investment in worthwhile projects.
• D) They tend to benefit foreign companies at the expense of domestic firms.

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