All of the following lead people to be credit constrained except a person's credit history. savings. collateral. banking regulations. b. The most important consequence of credit constraints on individuals is difficulty in obtaining gainful employment. an ability to retire at an earlier age. lower interest rates on bank loans. an inability to smooth consumption.

A person's credit history, savings level and collateral are all very useful in determining if they have the ability to pay back debt. Banking regulations do not directly lead to a credit constraint.

Lower interests on bank loans is only given to more creditworthy entities whom the bank feels will be able to pay back. A credit constrained person is risky and will therefore draw a higher rate from banks to balance that risk.

priyankapandeyVT priyankapandeyVT · Answer 2 · 2022-04-12T11:11:30+02:00

Credit constraints mean the inability of a person to borrow money from the market. the banking regulations and lower interest rates are the exceptions for persons credit-constrained.

What is credit constrained?

It is the inability of a borrower to borrow more money from the lender because, in the opinion of the lender, the borrower does not have the creditworthiness that he/she would pay the debt in time.

The following are the exception to persons being credit-constrained :

The Banking regulations
Bank loan with lower interest rate.

Therefore, it can be said the above option aptly explains the exception that leads to persons being credit-constrained :

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