As a Result of a Recession,the Default Risk Increases

question 107

Multiple Choice

As a result of a recession,the default risk increases.How does this change affect the loanable funds market?

• A)There is a movement up along the supply of loanable funds curve.
• B)There is a leftward shift of the supply of loanable funds curve.
• C)There is a movement down along the demand for loanable funds curve.
• D)There is a rightward shift of the supply of loanable funds curve.
• E)There is a movement up along the demand for loanable funds curve.

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Definitions:

Detrimentally Relied

A legal principle where a party suffers a loss due to reliance on a promise or statement of another.

Donee Beneficiary

A third party who benefits from a contract between two other parties, especially in the context of gifts or donations.

Incidental Beneficiary

A third party who benefits from a contract between two other parties, but has no rights to enforce the terms of the contract or claim damages for its breach.

Corporate Beneficiary

An entity that is designated to receive benefits or proceeds from a legal instrument, such as a trust, will, or insurance policy, in a corporate context.