Asked by Carina Campos on May 30, 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.
Interest Rates
The cost of borrowing money or the reward for saving, typically expressed as a percentage of the principal.
Longer-Term Loans
Loans with a repayment period that extends beyond the typical short-term or intermediate-term period, often used for major investments.
- Comprehend the function of interest rates in achieving balance within financial markets.
Verified Answer
MC
Megan CurtisJun 01, 2024
Final Answer :
B
Explanation :
Interest rates are typically higher on small loans than on larger loans due to the higher administrative costs per dollar lent and potentially higher risk associated with smaller loans.
Learning Objectives
- Comprehend the function of interest rates in achieving balance within financial markets.