Evaluate the congresswoman’s argument

Reference no: EM131304261

A Congresswoman introduces a bill to outlaw credit rationing by banks. The bill would require that every applicant be granted a loan, no matter how high the risk that the applicant would not pay back the loan. She defends the bill by arguing: There is nothing in this bill that precludes banks from charging whatever interest rate they would like on their loans; they simply have to give a loan to everyone who applies. If the banks are smart, they will set their interest rates so that the expected return on each loan-after taking into account the probability that the applicant will default on the loan-is the same. Evaluate the Congresswoman's argument and the likely effects of the bill on the banking system.

Reference no: EM131304261

Questions Cloud

What are four dimensions of social responsibility : What is social responsibility, and why is it important?- What are four dimensions of social responsibility? What impact do they have on marketing decisions?

Determine the moral status of the fetus : Which theory or theories are being used by Jessica, Marco, Maria, and Dr. Wilson to determine the moral status of the fetus? Explain. How does the theory determine or influence each of their recommendation for action

How can she and her family deal with those challenges : Which LTC provider would best address Ebony's needs at this point in her life? How will this LTC's services address LTC's needs?What are the challenges that must be considered in placing Ebony in your selected LTC? How can she and her family dea..

Provide a definition of the term operating environment : Identify the Political, Economic, Social, Technological, Environmental and Legal operating environments for each business unit identified for the study.

Evaluate the congresswoman’s argument : Evaluate the Congresswoman's argument and the likely effects of the bill on the banking system.

Who or what is affected by this problem or issue : What is the research problem or issue?Who or what is affected by this problem or issue?What are some specific examples of research studies, evaluations, reports, literature reviews, etc. that address it?What are the findings of these sources, and wha..

Identify publications at the library or online : Identify publications at the library or online that provide information about the environmental forces likely to affect the business.

What are off-balance-sheet activities : Why did nationwide banking come relatively late to the United States compared with other countries?

Identify at least one technological advancement : Identify at least one technological advancement and one sociocultural change that have affected you as a consumer. Explain the impact of each on your needs as a customer.

User Account

All Pages