A decline in bank lending has the most significant effect on
A) small businesses.
B) large businesses.
C) state governments.
D) the federal government.

Question

Quizplus · Accepted Answer

Small businesses often rely heavily on bank loans to finance operations and growth. A decline in bank lending can make it difficult for small businesses to access the capital they need to survive or expand, potentially leading to layoffs or closures. Large businesses may have more options for financing, such as accessing the bond market or utilizing internal funds, so they may be less impacted by a decline in bank lending. State and federal governments have other sources of revenue beyond bank lending, such as taxes and fees, so they are also less affected by changes in bank lending.

A Decline in Bank Lending Has the Most Significant Effect