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valputin valputin
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8 years ago
Debt deflation occurs when
A) lenders reduce their lending due to declining stock prices (equity deflation) that lowers the value of collateral.
B) corporations pay back their loans before the scheduled maturity date.
C) rising interest rates worsen adverse selection and moral hazard problems.
D) an economic downturn causes the price level to fall and a deterioration in firms' net worth because of the increased burden of indebtedness.
Textbook 
The Economics of Money, Banking and Financial Markets, Business School Edition

The Economics of Money, Banking and Financial Markets, Business School Edition


Edition: 4th
Author:
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Our course uses > The Economics of Money, Banking and Financial Markets
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MeelaMeela
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8 years ago
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valputin Author
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#2
8 years ago
Correct
Our course uses > The Economics of Money, Banking and Financial Markets
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#3
8 years ago
You're very welcome, valputin
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