Banks Require Collateral for Loans in Order to

question 80

Multiple Choice

Banks require collateral for loans in order to

• A)ensure that borrowers have significant amounts of their own funds invested in their businesses.
• B)charge higher interest rates on loans.
• C)reduce their tax liability on the interest they collect on loans.
• D)reduce the total amount they are obliged to lend to any one borrower.

---

Definitions:

Objective Reality

Objective reality refers to the existence of an external and independent reality that remains constant regardless of individual perceptions or beliefs.

Preindustrial Societies

Societies characterized by limited technological advancement and economies based on subsistence farming or hunting and gathering.

Industrial Societies

Societies characterized by a reliance on mechanized labor to create goods, often leading to advanced technology and economic growth.

Economic Organization

The arrangement and coordination of activities and resources within a society or among entities to achieve economic objectives.