Question

Development financial institutions were established to ..........

• A. provide short term funds.
• B. develop industry, agriculture and other key sectors.
• C. regulate the money market.
• D. regulate the capital market.

Hint:

DFIs help in financing projects that promote long-term economic growth and employment.

Answer 1

The Correct Option is B

Step 1: Understand the role of development financial institutions.
Development financial institutions (DFIs) are set up by governments to provide long-term capital for the growth and expansion of industries, infrastructure, and other critical sectors like agriculture.

Step 2: Analyze the options.
- Option (a) is incorrect because DFIs are primarily focused on long-term investments, not short-term funds.
- Option (b) is correct as DFIs aim to develop key sectors like industry and agriculture.
- Option (c) and (d) are incorrect because DFIs do not primarily regulate the money or capital markets.

Step 3: Conclude.
Thus, development financial institutions were established to promote the development of industries, agriculture, and other key sectors.

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