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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 Preview

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

    Solution Summary

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