Governments in developing countries sometimes adopt policies that retard the efficient operation of their financial systems.These actions include policies that
A) prevent lenders from foreclosing on borrowers with political clout.
B) nationalize banks and direct credit to politically favored borrowers.
C) make it costly to collect payments and collateral from defaulting debtors.
D) do all of the above.
E) do only A and B of the above.

Question

Quizplus · Accepted Answer

Governments in developing countries often adopt policies that hinder efficient operations of their financial systems such as preventing lenders from foreclosing on borrowers with political ties, nationalizing banks and directing credit to politically favored borrowers, and making it costly to collect payments and collateral from defaulting debtors. Hence, all the mentioned policies are adopted by governments in developing countries which retard efficient operations of their financial systems.

Governments in Developing Countries Sometimes Adopt Policies That Retard the Efficient