In Developing Countries, It Is Not True That

question 51

Multiple Choice

In developing countries, it is not true that

• A)banks are often viewed with suspicion
• B)at the first sign of economic problems, many bank depositors withdraw their funds
• C)because banks cannot rely on a continuous supply of deposits, banks cannot make loans for extended periods
• 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 percent of total output is one fifth that in high-income countries

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Definitions:

Deficits

The amount by which a government's, company's, or individual's spending exceeds its income over a particular period of time.

Developing Countries

Nations with lower levels of industrialization, lower standards of living, and, in general, lower Human Development Index (HDI) scores than developed countries.

Consumption Increases

A situation where there is a rise in the amount of goods and services consumed by individuals or communities, often indicating economic growth or changes in consumer behavior.

China and India

Refers to the two most populous countries in the world, both of which are rapidly growing economies with significant impacts on global trade, politics, and the environment.