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.


B

Economics

You might also like to view...

Public transit offers discounted monthly passes to students, which can only be bought and used with valid student IDs. The transit system is using

a. A direct discrimination scheme b. An indirect discrimination scheme c. The Robinson-Patman act d. None of the above

Economics

If consumers elect to postpone consumption so they can have a more enjoyable future, the supply of loanable funds would increase and the market rate of interest would fall

a. True b. False

Economics

Which of the following firms best fits the definition of a monopoly?

A. General Motors B. Exxon Mobil C. Local electric utility D. AT&T

Economics

People are said to have rational expectations if they

A. use all available information in forming their expectations. B. assume that this year's inflation rate will be equal to the average inflation rate over the past 10 years. C. assume that this year's inflation rate will be the same as last year's inflation rate. D. merely guess at the inflation rate.

Economics