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What Is the Main Problem with Government Guarantees That Socialize

Question 247

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What is the main problem with government guarantees that socialize losses and privatize gains?


A) They encourage overly risky investments by insulating private investors from any losses.
B) The investments that do occur never generate production of goods underproduced by the private sector.
C) They discourage private investment in worthwhile projects.
D) They tend to benefit foreign companies at the expense of domestic firms.

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