Learning Path
Question & Answer
Choose the Best Answer
Higher creditworthiness generally leads to lower interest rates.
Higher creditworthiness results in higher interest rates.
Creditworthiness does not affect interest rates.
Interest rates are only influenced by the overall economy.
Understanding the Answer
Let's break down why this is correct
A person who can reliably pay back a loan is seen as less risky. Other options are incorrect because Some think a good credit record means the bank wants to earn more, so they raise the rate; Credit score does affect costs.
Key Concepts
Loanable Funds Market Analysis
easy level question
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Deep Dive: Loanable Funds Market Analysis
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Definition
Loanable Funds Market Analysis involves examining how changes in demand for loans impact real interest rates in response to shifts in investor optimism or pessimism about future business conditions. By analyzing graphs and understanding the relationship between loan demand and interest rates, economists can predict market reactions to economic uncertainties.
Topic Definition
Loanable Funds Market Analysis involves examining how changes in demand for loans impact real interest rates in response to shifts in investor optimism or pessimism about future business conditions. By analyzing graphs and understanding the relationship between loan demand and interest rates, economists can predict market reactions to economic uncertainties.
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