Credit Rationing by an FI

question 86

Multiple Choice

Credit rationing by an FI

• A)involves restricting the quantity of loans made available to individual borrowers.
• B)results from a positive linear relationship between interest rates and expected loan returns.
• C)is not used by FIs at the retail level.
• D)involves rationing consumer loans using price or interest rate differences.
• E)is only relevant to banks.

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Definitions:

Sole Proprietorships

Sole proprietorships are businesses owned and operated by a single individual, where there is no legal distinction between the owner and the business entity.

Sole Proprietor

The single person at the head of a sole proprietorship.

Terminated

Brought to an end; refers to processes, contracts, employment, or periods that have been concluded or stopped.

Business Ownership

The legal possession of a business entity, which includes the right to control its operations and benefit from its earnings.