The Private Supply of Credit Is an Increasing Function of the Real

question 30

Multiple Choice

The private supply of credit is an increasing function of the real interest rate if

• A) the substitution effects outweighs the income effects when added across all consumers.
• B) the income effects outweighs the substitution effects when added across all consumers.
• C) the income effect outweighs the substitution effects for borrowers.
• D) the substitution and income effects cancel each other.
• E) consumers are rational.

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Definitions:

Objective Standard

A legal standard based on what a reasonable person would believe or do under similar circumstances.

Uniform Commercial Code

A standardized collection of laws and regulations for the conduct of business transactions and the sale of goods across the United States.

Good Faith

An honest intention to act without taking an unfair advantage over another person.

Wrongful Rejection

The unjustified refusal of a buyer to accept goods or services as stipulated in a contract.