Suppose you can receive an interest rate of 3 percent on a certificate of deposit at a

Question:

Suppose you can receive an interest rate of 3 percent on a certificate of deposit at a bank that is charging borrowers 7 percent on new car loans. Why might you be unwilling to loan money directly to someone who wants to borrow from you to buy a new car, even if that person offers to pay you an interest rate higher than 3 percent?
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Economics

ISBN: 978-0134106243

6th edition

Authors: R. Glenn Hubbard

Question Posted: