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Lazale Wilkerson
on Oct 08, 2024

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Under what circumstances would government loan guarantees be socially beneficial?

A) When the guarantees socialize losses and privatize gains.
B) When the guarantees stimulate production of goods generating significant spillover costs.
C) When the guarantees promote production of goods otherwise underproduced by the private sector.
D) When the guarantees increase company profits.

Socially Beneficial

Activities or policies that result in positive outcomes for the wider community or society at large.

Government Loan Guarantees

Financial guarantees provided by the government to lenders, ensuring repayment of loans in case the borrower defaults.

Spillover Costs

Indirect costs incurred by third parties who were not part of an economic transaction, often relating to negative environmental or health effects.

  • Elucidate the methods through which government loan guarantees affect economic performance.
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SG
Shawnie GreenOct 13, 2024
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