Why Might the Community Reinvestment Act of 1977 Backfire in Its

question 30

Multiple Choice

Why might the Community Reinvestment Act of 1977 backfire in its long-run effects on credit supply?

• A)Its limits on credit card interest rates may lead to banks offering fewer credit cards.
• B)Its requirements for local lending raise the cost of operating banks in urban areas and may lead to fewer banks entering these communities over time.
• C)Its requirement that banks buy large amounts of local municipal bonds may lead to reckless spending by local governments.
• D)Its requirement that banks make loans only for investment purposes may reduce the loans available for consumption purposes.

Understand the financial implications of continuing or discontinuing products based on their variable costs and traceable fixed costs.

Comprehend the concepts of joint products and the decision-making process after the split-off point.

Recognize the benefits and implications of vertical integration in supply chain management.

Analyze the impact of production constraints and overtime on company profits.

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Definitions:

Current Assets

Assets that are expected to be converted into cash, sold or consumed within one year or within the operating cycle of a business, whichever is longer.

Intangible Assets

Non-physical assets that have value, such as patents, trademarks, and copyrights, known for their long-term benefits to a company.

Gain on Sale

The profit recognized when an asset is sold for more than its carrying amount.

Other Revenue

Income that a business earns from activities not related to its primary operations, such as investment income or rental income.