Debt deflation occurs when A) corporations pay back their loans before the scheduled maturity date. B)...

Question

Question

Debt deflation occurs when A) corporations pay back their loans before the scheduled maturity date. B)...

Debt deflation occurs when

A) corporations pay back their loans before the scheduled maturity date.

B) an economic downturn causes the price level to fall and a deterioration in firms' net worth because of the increased burden of indebtedness.

C) lenders reduce their lending due to declining stock prices (equity deflation) that lowers the value of collateral.

D) rising interest rates worsen adverse selection and moral hazard problems.

business economics

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Ans) the correct option is b) an economic downturn causes the price level to fall and a deterioration in firms' net worth because of the increased burden of indebtedness.

Add a comment

Answer 2

Similar Homework Help Questions

1. Cause 2. Dynamics 3.draw a figure Ilallulul chsis that included debt deflation was the Great Depression, the worst et nomic contraction in U.S. history CATIO +The Mother of All Financial Crise...

1. Cause 2. Dynamics 3.draw a figure Ilallulul chsis that included debt deflation was the Great Depression, the worst et nomic contraction in U.S. history CATIO +The Mother of All Financial Crises: The Great Depressi In 28 and 192 prices doubled in the U.S stock market. Federal Reserve offcal vie market boom as excessive speculation. To curb it, they pursued a tigh monetary policy to raise interest rates; the Fed got more than it bargained for when th stock market...
I need Summary of this Paper i dont need long summary i need What methodology they used , what is the purpose of this p...

I need Summary of this Paper i dont need long summary i need What methodology they used , what is the purpose of this paper and some conclusions and contributes of this paper. I need this for my Finishing Project so i need this ASAP please ( IN 1-2-3 HOURS PLEASE !!!) Budgetary Policy and Economic Growth Errol D'Souza The share of capital expenditures in government expenditures has been slipping and the tax reforms have not yet improved the income...

Debt deflation occurs when A) corporations pay back their loans before the scheduled maturity date. B)...

Homework Answers

Add Answer to:
Debt deflation occurs when A) corporations pay back their loans before the scheduled maturity date. B)...

Post as a guest

Earn Coins

1. Cause 2. Dynamics 3.draw a figure Ilallulul chsis that included debt deflation was the Great Depression, the worst et nomic contraction in U.S. history CATIO +The Mother of All Financial Crise...

I need Summary of this Paper i dont need long summary i need What methodology they used , what is the purpose of this p...

Debt deflation occurs when A) corporations pay back their loans before the scheduled maturity date. B)...

Homework Answers

Add Answer to: Debt deflation occurs when A) corporations pay back their loans before the scheduled maturity date. B)...

Post as a guest

Earn Coins

1. Cause 2. Dynamics 3.draw a figure Ilallulul chsis that included debt deflation was the Great Depression, the worst et nomic contraction in U.S. history CATIO +The Mother of All Financial Crise...

I need Summary of this Paper i dont need long summary i need What methodology they used , what is the purpose of this p...

Add Answer to:
Debt deflation occurs when A) corporations pay back their loans before the scheduled maturity date. B)...