Question

Please explain your answer! When banks owned or influenced by the government engage in politicized lending:

A.
everyone benefits.

B.
they are less likely to channel loanable funds to their highest-valued uses.

C.
the return to saving increases.

D.
economic growth increases.

Answer 1

The government involvement in undertaking the control of banks leads to the political lend of new projects that increase economic growth.

Option(d):

Step-by-step explanation:

• Government ownership of a bank is an act that is very common for all countries and its facilities in expanding the financial status of the bank.
• The government provides more policies and regulations that involve broad expansion in fiscal policies that are not possible in private banks.
• They mainly focus on the factors that improve the GDP value and this, in turn, improves the economic growth of a country.
• Also, it concentrate on banks that have a lower economy and provides a necessary upliftment to improve its status.
• Negative issues arouse in this process is that banks provide loan based on political status and not based on any project for which the loan is afforded.
• Thus it affects the political status of the bank.