When the Availability of Credit Becomes Limited,which of the Following

question 64

Multiple Choice

When the availability of credit becomes limited,which of the following is most likely to be the result for commercial borrowers?

• A) stringent classification of assets in terms of retention by the business
• B) stringent requirements to maintain inventory and book debts at specified levels
• C) stringent lending terms affecting fees, rates, and monitoring of performance
• D) requirements to submit financial reports and maintain specified debt/equity ratios

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Definitions:

Total Expenditures

The overall amount spent on goods and services.

Utility Function

A mathematical representation of how individual preferences are aggregated to represent satisfaction or utility from consuming goods and services.

Marginal Utility

The additional satisfaction or benefit received by consuming one more unit of a good or service.

Budget Line

A representation of all possible combinations of two goods that an individual can afford given their income and the prices of the goods.