When Conflicts of Interest Exist,lenders Impose Higher Interest Rates to Reflect

question 79

True/False

When conflicts of interest exist,lenders impose higher interest rates to reflect greater default risk.

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Definitions:

Recessionary Gap

The difference between the actual output of an economy and its potential output at full employment, during a recession.

Discount Rate

The rate at which the central bank lends money to commercial banks and other financial institutions through its discount window.

Fiscal Expenditure

Government spending, including spending on goods and services, welfare, and public works, financed through taxation or borrowing.

Taxes

Taxes are compulsory financial charges or levies imposed by a government on individuals or entities to finance government spending and various public expenditures.