30.03.2023 - 00:15

The supply curve for loans to high-risk borrowers is __ the supply curve for loans to low-risk borrowers a. below b. flatter than c. to the right of d. to the left of

The supply curve for loans to high-risk borrowers is _____ the supply curve for loans to low-risk borrowers.

a. below

b. flatter than

c. to the right of

d. to the left of

Answers (1)
  • Artmusic
    April 3, 2023 в 07:38

    The answer is (a) below.

    The supply curve for loans to high-risk borrowers is below the supply curve for loans to low-risk borrowers because lenders demand a higher interest rate to compensate for the increased risk of default when lending to high-risk borrowers. As the interest rate increases, the quantity of loans supplied by lenders to high-risk borrowers decreases, resulting in a downward-sloping supply curve. On the other hand, the supply curve for loans to low-risk borrowers is higher because lenders are willing to supply more loans at a lower interest rate due to the lower risk of default. Therefore, the supply curve for loans to low-risk borrowers is steeper than the supply curve for loans to high-risk borrowers.

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