Which of the Following Situations Is Similar to the Externality

question 65

Multiple Choice

Which of the following situations is similar to the externality effect?

• A)Exercising an adverse material change in conditions clause as a last resort, thereby canceling or repricing a loan commitment.
• B)Increase in the cost of funds above normal levels while many FIs scramble for funds to meet their commitments to customers during a credit crunch.
• C)In a loan commitment, the borrower takes down only part of the funds over the specified time-period.
• D)The buyer of a commercial letter of credit fails to perform as promised under a contractual obligation.
• E)All of the options.

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Definitions:

Organizational Costs

Costs associated with the day-to-day operations, management, and support activities within an organization.

HRM Effectiveness

A measure of how successfully human resource management strategies and practices achieve their intended outcomes within an organization.

Employee Attitudes

The feelings, beliefs, and values that employees hold towards their work, workplace, and colleagues.

Motivation

The reason or reasons one has for acting or behaving in a particular way; an internal process that activates, guides, and maintains behavior over time.