In the textual example, Muhammad Yunus was highly successful in his use of applying social incentives through group responsibility in order to maximize loan repayment rates. This success created an incentive for other banks to:
A. go out of business.
B. seek government action to ban group responsibility lending.
C. avoid catering to a high risk group.
D. offer similar loans to the poor.
Answer: D
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Everything else remaining unchanged, what is likely to happen to the equilibrium real interest rate and quantity of credit if the credit demand curve shifts to the left?
A) Both equilibrium rate of interest and quantity of credit will decrease. B) Both equilibrium rate of interest and quantity of credit will increase. C) The equilibrium rate of interest will decrease and the quantity of credit will increase. D) The equilibrium rate of interest will increase and the quantity of credit will decrease.
If the government of a country uses contractionary monetary policy:
A) its currency will depreciate. B) its currency will appreciate. C) its currency will neither depreciate nor appreciate. D) its currency will initially appreciate then depreciate.
As the supply curve shifts to the right, the increase in quantity demanded will not depend on the shape of the demand curve
Indicate whether the statement is true or false
Devaluation of a domestic currency
a. is also called revaluation b. refers to an increase in a floating exchange rate c. refers to a decrease in a floating exchange rate d. refers to an increase in a fixed exchange rate e. refers to a decrease in a fixed exchange rate