JAMB Economics 2020 Objective — Question 48

Question 48 of 50 from the Joint Admissions and Matriculation Board (JAMB) Economics 2020 Objective paper, with the correct answer and a full explanation.

The rate of interest change on loans depends largely on

A. the prevailing exchange rate
B. marginal efficiency of capital
C. the risk associated with the loanCorrect
D. the prevailing tax rate

Explanation

The interest rate charged on a loan largely reflects the level of risk associated with that loan.

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