When banks owned or influenced by the government engage in politicized lending:

Question

Quizplus · Accepted Answer

When banks owned or influenced by the government engage in politicized lending, they are not able to channel loanable funds to their highest-valued uses. This leads to inefficiencies in the allocation of resources and can result in a misallocation of capital. This can ultimately harm the economy by reducing productivity and growth. Therefore, option C is the best choice. Options A, B, and D do not accurately describe the effects of politicized lending by government-owned banks.

When Banks Owned or Influenced by the Government Engage in Politicized