Everything else held constant, an international bank based in New York would prefer to loan money to an efficient firm operating in San Paulo, Brazil, than an inefficient firm operating in southern California.

Question

Quizplus · Accepted Answer

As an international bank, the main priority is to minimize risks and maximize returns. Loaning money to an efficient firm operating in San Paulo, Brazil, presents a better opportunity for the bank as such firms have a higher chance of paying back the loan with interest, unlike an inefficient firm operating in southern California. Therefore, the bank would prefer to loan money to the efficient firm in San Paulo, Brazil.

Everything Else Held Constant, an International Bank Based in New