This topic contains a solution. Click here to go to the answer

Author Question: What are the benefits of bankruptcy laws that enable lenders to seize the assets of firms that ... (Read 33 times)

Sufayan.ah

  • Hero Member
  • *****
  • Posts: 512
What are the benefits of bankruptcy laws that enable lenders to seize the assets of firms that default on loan contracts?
 
  What will be an ideal response?

Question 2

As the U.S. economy recovers from the recession of 2007-2009, stubbornly high unemployment is a concern. For each of the three business cycle models, identify the appropriate policy regime.
 
  What will be an ideal response?



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

helenmarkerine

  • Sr. Member
  • ****
  • Posts: 324
Answer to Question 1

When borrowers are aware that default will lead to asset seizure, they will work harder to avoid default. When lenders know that borrowers will do all they can to avoid default, they will offer more funds at lower cost. The result is more and more-productive economic activity. When default occurs, the seizure of assets is a reallocation of resources that raises their value and supports economic growth.

Answer to Question 2

The traditional Keynesian model advises a low real interest rate and a large fiscal deficit to stimulate aggregate demand. The new Keynesian model recommends a moderate stimulus and public announcement of policy makers' commitment to achieving the lowest possible rate of unemployment consistent with price stability. The real business cycle model cautions that policies to promote high employment must operate through incentives to work and to invest, so that aggregate productivity is improved.




Sufayan.ah

  • Member
  • Posts: 512
Reply 2 on: Jun 30, 2018
Great answer, keep it coming :)


vickybb89

  • Member
  • Posts: 347
Reply 3 on: Yesterday
:D TYSM

 

Did you know?

More than 30% of American adults, and about 12% of children utilize health care approaches that were developed outside of conventional medicine.

Did you know?

Autoimmune diseases occur when the immune system destroys its own healthy tissues. When this occurs, white blood cells cannot distinguish between pathogens and normal cells.

Did you know?

The liver is the only organ that has the ability to regenerate itself after certain types of damage. As much as 25% of the liver can be removed, and it will still regenerate back to its original shape and size. However, the liver cannot regenerate after severe damage caused by alcohol.

Did you know?

The effects of organophosphate poisoning are referred to by using the abbreviations “SLUD” or “SLUDGE,” It stands for: salivation, lacrimation, urination, defecation, GI upset, and emesis.

Did you know?

The most common treatment options for addiction include psychotherapy, support groups, and individual counseling.

For a complete list of videos, visit our video library