A Credit Crunch Occurs When

question 40

Multiple Choice

A credit crunch occurs when

• A)interest rates decline.
• B)interest rates rise.
• C)creditors restrict the amount of loans they are willing to provide.
• D)the economy is strong.

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Definitions:

Neoclassical Economics

A branch of economics focusing on the determination of goods, outputs, and income distributions in markets through supply and demand.

Utilitarianism

A philosophical theory focusing on outcomes and consequences, suggesting the best action is the one that maximizes utility, usually defined as maximizing happiness and reducing suffering.

Behaviorism

A psychological approach that emphasizes the study of observable behaviors and the external stimuli that lead to them, discounting the importance of internal mental states.

Opportunity Costs

The loss of potential gain from other alternatives when one alternative is chosen.