Final answer:
The statement is false; cash payments do not build credit history which is essential for securing loans. Lenders look at credit history, income stability, and other factors to determine creditworthiness. Greater market confidence and ability to repay debts increase the quantity of loans.
Step-by-step explanation:
The statement 'People who pay cash for everything they buy get loans easily' is generally false. While paying with cash may indicate that a person manages their money responsibly, it does not necessarily build credit history. Credit history and credit score, which are critical factors in a lender's decision to grant a loan, are established through the use of credit accounts, such as credit cards, student loans, auto loans, and mortgages. When an individual frequently uses cash for purchases and does not utilize credit accounts, lenders do not have a history to determine creditworthiness.
Moreover, the quantity of loans in the financial market will likely increase when there is greater confidence among consumers and businesses that they can repay their debts in the future. This could be due to increased employment rates or economic prosperity, making lenders more willing to offer loans and borrowers more inclined to take them. Factors such as having a steady income, low debt-to-income ratio, and a good credit history can improve the likelihood of obtaining a loan.