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A bank's commitment (for a specified future period of time) to provide a firm with loans up to a given amount at an interest rate that is tied to a market interest rate is called A) credit rationing.B)
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A bank's commitment (for a specified future period of time) to provide a firm with loans up to a given amount at an interest rate that is tied to a market interest rate is called

A) credit rationing.B) a line of credit.C) continuous dealings.D) none of the above.

User Teun Zengerink
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1 Answer

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Answer:

credit rationing

Step-by-step explanation:

Credit rationing is a situation in which borrowers give out a fixed amount of loan to lenders for a specified time at a rate tied to the market interest rate. In this situation, loans do not exceed a certain amount from the borrower no matter what attractive offers are given by the lenders to be able to get a larger loan amount. This is done by the borrower becasue the borrower is earning maximum profits from interest rates and also is a means to maintain equilibrum between loan funds and loan demands.

Cheers.

User Marshall X
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