What Is a Possible Reason Behind Restricted Supply of Spot

question 113

Multiple Choice

What is a possible reason behind restricted supply of spot loans to borrowers during a credit crunch?

• A)Expansionary monetary policy actions of the Federal Reserve.
• B)FI's increased aversion toward lending.
• C)Shift to the right in the loan supply function at all interest rates.
• D)Low aggregate demand from borrowers to take down loan commitments.
• E)Decrease in cost of funds.

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Definitions:

Estimated Entry

An accounting entry made to record expected but not yet realized financial transactions or adjustments.

Net Realizable Value

The estimated selling price in the ordinary course of business, minus any costs reasonably expected to be incurred in completion, transportation, and selling.

Gross Accounts Receivable

The total amount owed to a business by its customers before adjusting for any allowances for doubtful accounts.

Allowance for Doubtful Accounts

A contra-asset account that represents the amount of receivables a company does not expect to collect.