Will the problems of credit markets disappear when developing countries become more affluent?
What will be an ideal response?
Answer: The general problems of credit markets discussed in this chapter are the same in all countries so these problems will not disappear. There are nevertheless some specifics related to development countries. First of all, it is less easy to use collateral in lending in developing countries because people are poorer. Moreover, weaker institutions may make is less easy to use collateral even when it exists.
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Thrift institutions
A) include commercial banks and investment firms. B) include credit unions but not savings and loan associations. C) do not offer transaction deposits. D) receive most of their funds from the public's savings deposits.
If the total revenue collected by the federal government in a particular year is $1.2 billion and the total amount spent by the government during the same year is $3.8 billion, what is the budget deficit?
A) $1.6 billion B) $2.6 billion C) $2.2 billion D) $5 billion