The Institutional Sources of Credit, Such as the Banks, Are

question 58

Multiple Choice

The institutional sources of credit, such as the banks, are usually reluctant to finance microenterprises, and in many instances they exclude the microentrepreneurs from formal financial services because:

• A) microentrepreneurs are unable to provide the demanding physical collateral for such loans
• B) microenterprises are considered 'high risk' business entities because of the high rate of failure among newly established small business
• C) extending credit facilities to microenterprises is considered uneconomical due to the high running cost involved per unit of credit.
• D) all of the above

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Definitions:

Mutual Interdependence

A situation in oligopoly markets where the actions of one firm directly affect and are affected by the actions of other firms.

Monopolistic Competition

A market structure characterized by many firms selling products that are similar but not identical, allowing for significant influence over price.

Countervailing Power

The theory that competitive markets can be achieved through balancing the power of large companies by organizing a counterforce, such as labor unions or government regulations.

Homogeneous Oligopoly

A market structure in which a few firms offer identical or very similar products or services, leading to significant interdependence in decision-making.