One possible reason for slower growth in developing and transition countries is
A)capital may not be directed to its most productive use.
B)strict accounting standards are too stringent for the banks to meet.
C)the weak link between government and financial intermediaries.
D)the lack of adverse selection and moral hazard problems.

Question

Quizplus · Accepted Answer

If capital is not directed to its most productive use, it can lead to slower growth in developing and transition countries. This can happen due to factors like corruption, poorly designed policies, or lack of access to credit for small businesses. As a result, resources may be misallocated or underutilized, which can hinder economic growth. The other options do not provide as clear a reason for slower growth in developing and transition countries.

One Possible Reason for Slower Growth in Developing and Transition