In many developing and transition countries,commercial banks are owned by their governments. These ________ may have little incentive to allocate their capital to the most productive uses.
A)state-owned banks
B)central banks
C)national banks
D)federal banks

Question

Quizplus · Accepted Answer

State-owned banks are banks that are fully or partially owned by the government. Since their owners are the government, they may not have the same profit motive as private banks. As a result, there may be little incentive for state-owned banks to allocate their capital to the most productive uses. This can lead to a misallocation of resources and lower economic growth.

In Many Developing and Transition Countries,commercial Banks Are Owned by Their