Which of the Following Statements Is FALSE

question 44

Multiple Choice

Which of the following statements is FALSE?

• A)Regardless of the loan structure,the bank may include a compensating balance requirement in the loan agreement that reduces the usable loan proceeds.
• B)Another common type of fee is a loan origination fee,which a bank charges to cover credit checks and legal fees.
• C)Firms frequently use lines of credit to finance seasonal needs.
• D)The commitment fee associated with a committed line of credit is designed to decrease the effective cost of the loan to the firm.

---

Definitions:

Supply of Land

The total quantity of available land or real estate, which is inherently fixed but can vary in usability and value due to location, zoning, and development.

Marginal Land

Land that produces little yield or economic value due to poor quality, location, or other factors, making it the least productive for agricultural use.

Rents

Payments made periodically by a tenant to a landlord in exchange for the use of land, a building, or other property.

Supply of Loanable Funds

The total amount of funds that lenders are willing to loan at a given interest rate in an economy.