If lenders think that a particular borrower might default, they will demand a:
A. higher interest rate to decrease the amount of risk incurred.
B. lower interest rate to decrease the amount of risk incurred.
C. higher interest rate to make it worth taking that risk.
D. lower interest rate to make it worth taking that risk.
Answer: C
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Arbitrage opportunities exist when uncovered interest rate parity does not hold
Indicate whether the statement is true or false
Figure 36-3
?
Which of the situations illustrated in Figure 36-3 shows the effects of a currency appreciation leading to real GDP growth?
A. 1 B. 2 C. 3 D. 4
Wealth and consumption rise when there is a stock market
A. split. B. crash. C. boom. D. merger.
Refer to the diagram for a pure monopolist. Monopoly output will be:
A. between f and g.
B. h.
C. g.
D. f.