Which of the Following Statements Is False

question 13

Multiple Choice

Which of the following statements is false?

• A) Regardless of the loan structure, the bank may include a compensating balance requirement in the loan agreement that reduces the usable loan proceeds.
• B) Another common type of fee is a loan origination fee, which a bank charges to cover credit checks and legal fees.
• C) Firms frequently use lines of credit to finance seasonal needs.
• D) The commitment fee associated with a committed line of credit is designed to decrease the effective cost of the loan to the firm.

---

Definitions:

Reproducible Resources

Resources that can be grown, naturally replenished, or reproduced to sustain their availability over time, unlike finite resources.

Capital Goods

Long-term physical assets utilized by businesses to produce goods and services.

Single Tax

A tax system with only one type of tax, often proposed to simplify the tax structure and eliminate inefficiencies.

Henry George

A 19th-century economist known for his advocacy for a single tax on land value to improve social and economic inequalities.