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Author Question: During recessions, the value of collateral decreases and corporate profits decrease, so firms do not ... (Read 115 times)

lak

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  • Posts: 546
on: Jun 30, 2018
During recessions, the value of collateral decreases and corporate profits decrease, so firms do not have cash to finance new investment projects. Therefore, credit rationing depends on the state of the economy. This situation is known as the
 
  A) risk acceptance cost.
  B) lender's dilemma.
  C) default premium.
  D) financial accelerator.

Question 2

There are several competing models of the business cycle because
 
  A) none currently captures all facets of the business cycle.
  B) they are all rooted in different philosophical traditions.
  C) different shocks need different models.
  D) they depend on the type of policy that is adopted.


fur

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Reply #1 on: Jun 30, 2018
Answer to Question 1

D

Answer to Question 2

A


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