The Interest Rate Charged on a Secured Short-Term Loan to a Corporation

question 81

Multiple Choice

The interest rate charged on a secured short-term loan to a corporation is typically ________ the interest rate on an unsecured loan.

• A) lower than
• B) the same as
• C) unrelated to
• D) higher than

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Definitions:

Consumer Surplus

The difference between the total amount consumers are willing and able to pay for a good or service and the total amount they actually do pay.

Producer Surplus

The discrepancy between the price at which producers are inclined to sell a product and the actual price they get, frequently viewed as an indicator of the well-being of producers.

Tax

A mandatory monetary fee or a different kind of tax placed on an individual or entity by a government agency.

Producer Surplus

The gap between the minimum amount that sellers are prepared to accept for a product or service and the higher price they actually get.