Asked by Nareg Tufenkdjian on May 18, 2024
Verified
Which of the following generalizations is false? Other things equal:
A) interest rates are higher if lenders are imperfectly,rather than purely,competitive.
B) the interest rate is less on small loans than on larger loans.
C) long-term loans normally command higher interest rates than short-term loans.
D) the greater the risk on a loan,the greater the interest rate.
Imperfectly Competitive
A market structure where individual firms have some control over the price of their products due to factors like brand differentiation and barriers to entry.
- Understand the distinction between real and nominal interest rates and their determinants.
Verified Answer
JJ
Joseph JarboMay 24, 2024
Final Answer :
B
Explanation :
Other things being equal, the interest rate on smaller loans is usually higher than on larger loans because of the higher administrative costs of making a small loan.
Learning Objectives
- Understand the distinction between real and nominal interest rates and their determinants.