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Author Question: According to real business cycle theory, an increase in financial frictions might lead to ________, ... (Read 58 times)

kshipps

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on: Jun 30, 2018
According to real business cycle theory, an increase in financial frictions might lead to ________, if ________.
 
  A) a decrease in output; the rise in the credit spread causes a leftward shift of aggregate demand
  B) a decrease in inflation; the disruption of capital markets results in a leftward shift of long-run aggregate supply
  C) a decrease in output; the disruption of capital markets results in a leftward shift of long-run aggregate supply
  D) a decrease in output; a decline in expected output causes a leftward shift of aggregate demand

Question 2

Of all financial intermediaries which holds the most assets?
 
  A) pension funds
  B) commercial banks
  C) insurance companies
  D) hedge funds


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abro1885

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

C

Answer to Question 2

B


kshipps

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Reply 2 on: Jun 30, 2018
Great answer, keep it coming :)

robbielu01

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Reply 3 on: Yesterday
Wow, this really help

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