Which of the Following Is a Valid Criticism of the Regulations

question 13

Multiple Choice

Which of the following is a valid criticism of the regulations currently affecting banks and other lending institutions in Canada with respect to consumer debt?

• A) Federal government intervention in the system of credit hampers lenders' profit motive.
• B) Time is required to shop around for better terms and less restrictive lending conditions.
• C) Banks have the ability to extract whatever promise of security is deemed necessary to protect a loan.
• D) The regulations are unable to limit lenders from extracting blanket personal guarantees for loans.

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Definitions:

Government Spending

Expenditures made by the government for the purpose of economic activity, including salaries of public servants, public projects, and social services.

Recession

A marked reduction in economic performance widespread throughout the economy, persisting for more than a few months, often seen in real GDP, real income, employment, industrial production, and wholesale-retail sales.

Expected Profit Rate

The forecasted return or profit expressed as a percentage that a business or investment is projected to earn over a specific period.

Interest Rate

The percentage of an amount of money charged for its use, indicating the cost of borrowing money or the return on invested savings.