Which of the Following Is True of Loan Maturity

question 34

Multiple Choice

Which of the following is true of loan maturity?

• A)The longer the loan maturity,the higher the amount of interest paid.
• B)The shorter the loan maturity,the higher the total cost of borrowing.
• C)The longer the loan maturity,the higher the monthly payments.
• D)The shorter the loan maturity,the lower the monthly payments.
• E)The longer the loan maturity,the lower the total cost of borrowing.

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Definitions:

Coase Theorem

A principle in economics that suggests that if property rights are well-defined and trade is possible without cost, parties can negotiate to resolve externalities or conflicts over resource allocation efficiently themselves.

Optimal Allocation

The most efficient distribution of resources and efforts among various possible tasks or uses to maximize desired outcomes or objectives.

Social Good

refers to an action or a policy that benefits society at large, often with an emphasis on public resources and welfare.

Marginal Benefit (MB) Curve

A graphical representation that shows the additional satisfaction or utility a consumer receives from consuming one more unit of a good or service.