Which of the Following Does NOT Describe the Relationship Between

question 54

Multiple Choice

Which of the following does NOT describe the relationship between banks and small business during the 2000s (prior to the financial crisis) ?

• A) Banks typically applied fixed guidelines for granting loans, leaving little room for personal judgment.
• B) Fewer small businesses received loans as banks shifted their focus to mortgages.
• C) Many small businesses were receiving loans from regional and national banks.
• D) More banks became convinced that it would be profitable to loosen their loan guidelines to make more borrowers eligible to receive credit.

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Definitions:

Disposable Income

The financial capabilities households have for saving and spending endeavors post income tax deductions.

Consumption

The use of goods and services by households, including the acquisition of goods and services for personal use or ownership.

Induced Consumption

The portion of consumer spending that increases or decreases as disposable income increases or decreases, respectively.

Disposable Income

The collective fiscal pool available to households for spending and saving post income tax engagements.