One Thing Lenders Sometimes Require When Lending Money to a Small

question 194

Essay

One thing lenders sometimes require when lending money to a small corporation is an assignment
of the common stock as collateral on the loan. Then, if the business fails to repay its loan, the
ownership of the stock certificates can be transferred directly to the lender. Why might a lender
want such an assignment? What advantage of the corporate form of organization comes into play
here?

Understand the relationship between nominal and real interest rates and inflation.

Recognize the mechanisms of inflation and how it is measured.

Identify the different types of unemployment and their causes.

Grasp the concept and implications of being part of the labor force.