When financial institutions go on a lending spree and expand their lending at a rapid pace they are participating in a ________.
A) credit bust
B) credit boom
C) deleveraging
D) market race

Question

Quizplus · Accepted Answer

When financial institutions expand their lending at a rapid pace, it is called a credit boom. This refers to a period of easy credit availability and a surge in borrowings. It can lead to economic growth but can also cause asset bubbles and risky lending practices, which can eventually result in a credit bust. Deleveraging refers to the reduction of debt levels by individuals, companies, or governments. Market race is not a term used in finance.

When Financial Institutions Go on a Lending Spree and Expand