The Phenomenon That Some Consumers Pay a Higher Interest Rate

question 10

Multiple Choice

The phenomenon that some consumers pay a higher interest rate when they borrow than the interest rate they receive when they lend is best described as an example of

• A) irrational behaviour.
• B) a credit market imperfection.
• C) a vast banking conspiracy.
• D) the burden of public debt.
• E) predatory lending practices.

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Definitions:

Intelligence

The capacity for learning, reasoning, understanding, and similar forms of mental activity; aptitude in grasping truths, relationships, facts, meanings, etc.

Mental Retardation

An outdated term for intellectual disability, which is characterized by below-average intellectual functioning and a lack of skills necessary for daily living.

IQ Below 70

is often used as a diagnostic criterion for intellectual disability, indicating significant limitations in intellectual functioning and adaptive behavior.

Adaptive Functioning

Refers to an individual's ability to effectively manage everyday tasks and challenges, including social and practical skills.