A Line of Credit Can Be Either a Formal or an Informal

question 24

True/False

A line of credit can be either a formal or an informal agreement between a borrower and a bank regarding the maximum amount of credit the bank will extend to the borrower during some future period, assuming the borrower maintains its financial strength.

---

Definitions:

Public Choice Economists

Economists who apply economic theories and methodologies to the analysis of political behavior, focusing on the self-interested actions of voters, politicians, and bureaucrats.

Keynesian Economists

Economists who follow the principles of John Maynard Keynes, emphasizing the need for government intervention to manage economic cycles and maintain full employment.

Economics

The social science concerned with how individuals, institutions, and society make optimal (best) choices under conditions of scarcity.

Regulatory Capture

A situation where regulatory agencies, created to act in the public's interest, instead advance the commercial or special concerns of the industry or sector they are supposed to regulate.