In One Sense ________ Appears Surprising Since It Means That

question 102

Multiple Choice

In one sense ________ appears surprising since it means that the bank is not ________ its portfolio of loans and thus is exposing itself to more risk.

• A)specialization in lending;diversifying
• B)specialization in lending;rationing
• C)credit rationing;diversifying
• D)screening;rationing

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Definitions:

Excess Capacity

A situation where a firm is producing at a lower scale of output than it has been designed for.

Monopolistic Competitor

A firm operating in a market structure where many companies sell products that are similar but not identical, leading to competition based on product differentiation.

ATC Curve

Represents the average total cost of production at different levels of output, showing how cost per unit changes with scale.

Excess Capacity

The ability of a company to produce more goods or services than currently needed, exceeding the current demand.