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The volume of bank loans in the economy

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1) Would each of the following events increase or decrease the volume of bank loans? Explain.

a) New regulations make it easier for shareholders to replace company directors.

b) A new law makes it a felony to default on a bank loan.

c) All the economy's small firms are bought by large firms.

d) Mutual funds reduce their minimum balances for shareholders.

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Solution Summary

This solutions identifies what will happen to volume of bank loans given six (6) changes in the economy.

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Answer:
1-A. Decrease. This will create uncertainties on the future of the company and borrowers will stay from doing bank ...

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