When Firms Invest Less Because People Are Saving Less,it Is

question 98

Multiple Choice

When firms invest less because people are saving less,it is called the:

• A) wealth effect.
• B) international trade effect.
• C) interest rate effect.
• D) savings effect.
• E) investment effect.

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Definitions:

Collateralized Borrowing

A loan that is secured by collateral, meaning if the borrower defaults, the lender has the right to seize the asset(s) pledged as collateral.

Surrenders Control

In accounting or finance, refers to the act of a party giving up the authority or power over an asset or decision-making to another party.

Securitization

The financial process of pooling various types of contractual debt, such as mortgages or loans, and selling them as consolidated financial instruments to investors.

Securities Not Collateralized

Financial instruments or investments that are not backed by a physical asset or security, making them potentially riskier for investors since there is no guarantee of repayment through asset seizure.