Common Practices Used by Dishonest Lenders Include All of the Following

question 43

Multiple Choice

Common practices used by dishonest lenders include all of the following except the lender

• A)prohibiting the borrower from purchasing insurance or other financial services as a condition of the loan.
• B)charging high loan fees which cause financing costs to be much higher than the quoted rates.
• C)requiring that the borrower purchase insurance or other financial services.
• D)having a large balloon payment that will require additional financing to pay it off.

Identify strategies to increase compliance, including foot-in-the-door and door-in-the-face effects.

Describe the impact of social norms on individual behavior.

Explain the concept of groupthink and its potential negative outcomes on decision-making.

Understand the processes behind obedience to authority.

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Definitions:

Regulated Natural Monopolist

A company that legally operates a monopoly because it is more efficient to have a single provider of a service or good, but its operations and pricing are supervised by the government to prevent abuse.

Social Well-being

Refers to the overall quality of life and level of happiness and fulfillment experienced by individuals within a society.

Deregulating

The process of reducing or eliminating government regulations on industries to foster a more efficient and competitive business environment.

Electricity

A form of energy resulting from the existence of charged particles, used as a power source.