What Is Meant by a Positive Feedback Loop? Give an Example

question 38

Short Answer

What is meant by a positive feedback loop? Give an example of a positive feedback loop in the body.

Know the importance of credit scores in obtaining business loans.

Understand the differences between fixed-rate and variable-rate loans and their implications.

Recognize the limitations and features of term insurance policies in the context of borrowing.

Appreciate the significance and complexity of deciding to seek outside funds.

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Definitions:

Lending Decision

The process by which a lender evaluates the risk and potential of a loan application before granting funds to the borrower.

Net Profit

The total revenue of a company after subtracting all costs and expenses, including taxes and operational expenses.

Total Assets

The combined value of all resources owned by a company, including cash, investments, property, and equipment.

Startups

Newly established businesses, typically small, that aim to meet a marketplace need by developing a viable business model around a product, service, process, or platform.