When a Lender Refuses to Make a Loan,although Borrowers Are

question 7

Multiple Choice

When a lender refuses to make a loan,although borrowers are willing to pay the stated interest rate or even a higher rate,it is said to engage in ________.

• A) constrained lending
• B) strategic refusal
• C) credit rationing
• D) collusive behavior

Understand the definition and components of quick assets.

Identify the role of merchandise inventory in financial statements and its impact on operating cycles.

Recognize the categorization of expenses within the income statement.

Calculate and interpret the significance of the acid-test ratio for assessing liquidity.

---

Definitions:

Quotas

Quotas are limits set by a government on the amount of a particular commodity that can be imported or produced domestically in a certain period, used as a means to regulate trade and support local industries.

Comparative Advantage

The ability of an entity (could be a person, company, or country) to produce a good or service at a lower opportunity cost than another.

Domestic Prices

Relates to the cost of goods and services within a country's borders, which can be influenced by factors such as supply and demand, taxation, and government policies.

Euros

The official currency of the Eurozone, which is used by 19 of the 27 European Union member countries.