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Title: Due to asymmetric information in credit markets, monetary policy may affect economic activity throug Post by: valputin on Nov 29, 2015 Due to asymmetric information in credit markets, monetary policy may affect economic activity through the balance sheet channel, where an increase in the money supply
A) raises stock prices, lowering the cost of new capital relative to firms' market value, thus increasing investment spending. B) lowers the value of the dollar, increasing net exports and aggregate demand. C) raises firms' net worth, decreasing adverse selection and moral hazard problems, thus increasing banks' willingness to lend to finance investment spending. D) raises the level of bank reserves, deposits, and bank loans, thereby raising spending by those individuals who do not have access to credit markets. Title: Re: Due to asymmetric information in credit markets, monetary policy may affect economic activity th Post by: Meela on Nov 29, 2015 Content hidden
Title: Re: Due to asymmetric information in credit markets, monetary policy may affect economic activity throug Post by: valputin on Dec 14, 2015 Perfect answer, thx
Title: Re: Due to asymmetric information in credit markets, monetary policy may affect economic activity throug Post by: Meela on Dec 14, 2015 :) Good luck with the rest
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