An inherent weakness of ________ is the absence of the profit incentive.
A) government-directed credit
B) government-backed deposit insurance
C) private loans
D) prudential supervision
Question 2
Based on the Saving-Investment Diagram, the difference between values H and E could measure the net capital inflow, if ________.
A) the difference between values H and D measures the trade surplus
B) the domestic real interest rate is indicated by A
C) desired saving has increased
D) desired investment has decreased
E) none of the above
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