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Question
Because of the problems of adverse selection and moral hazard, it has been suggested that the World Bank and International Monetary Fund
A) make loans to the riskiest nations so that private investors will not be tempted to take a risk.
B) loan only to countries that have free elections.
C) not make loans to risky nations because there is a high demand for funds from safer nations.
D) impose tougher preconditions on borrowers.
Answer
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Related questions
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Why?
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