Loans guarantees provided by the government for specific private-sector investme

Question

Loans guarantees provided by the government for specific private-sector investments tend to:
A) attract private investors into the specific project
B) generate high positive returns for the government
C) increase the financial risk faced by the private investors
D) eliminate the moral hazard problem among investors Loans guarantees provided by the government for specific private-sector investments tend to:
A) attract private investors into the specific project
B) generate high positive returns for the government
C) increase the financial risk faced by the private investors
D) eliminate the moral hazard problem among investors Loans guarantees provided by the government for specific private-sector investments tend to:
A) attract private investors into the specific project
B) generate high positive returns for the government
C) increase the financial risk faced by the private investors
D) eliminate the moral hazard problem among investors

Explanation / Answer

A) attract private investors into the specific project

Because

government intervene in market and gives guarantees to the priority sector lendings

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