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When Lending Money to a Closely Held Corporation, What Will

question 2

Multiple Choice

When lending money to a closely held corporation, what will a bank usually insist on from the major shareholders or other principals?

Definitions:

Autonomous C

Spending by consumers that does not depend on current income levels, such as basic needs or contractual obligations.

Disposable Income

The budget households have for saving and spending activities after income taxes deductions.

Induced Consumption

Consumer spending that increases as income rises, and decreases when income falls, reflecting a direct relationship between income and consumption.

Consumption Function

An economic formula that represents the relationship between total consumption and gross national income.