To Help Offset the Costs from Loan Defaults, the First

question 70

Multiple Choice

To help offset the costs from loan defaults, the First National Bank of Gotham decides to increase the interest rate it charges on its business loans. As a result of this increase in the interest rate, the creditworthiness of Gotham's loan applicants is likely to

• A)improve.
• B)deteriorate.
• C)be unchanged.
• D)be unchanged, unless the economy enters a recession at the same time as the interest rate is increased.

---

Definitions:

Divergent Thinking

A cognitive process that involves generating creative ideas by exploring many possible solutions.

Hereditary Studies

Research into how characteristics and conditions are transmitted from parents to offspring through genes.

Genetic Engineering

The manipulation of an organism's genes using biotechnology, including the editing, adding, or removing of DNA sequences to achieve desired traits.

Displacement

A psychological defense mechanism where mind redirects emotions or feelings from the original source to a less threatening target.