Credit Rationing Implies That

question 16

Multiple Choice

Credit rationing implies that

• A)some firms cannot borrow even though they are willing to do so at high interest rates
• B)investment spending is affected not only by interest rates but also by the volume of profits and retained earnings
• C)the central bank can affect the economy not just by changing interest rates but also by imposing credit controls
• D)restrictive monetary policy by a central bank is reinforced by commercial banks' reluctance to extend loans for risky ventures
• E)all of the above

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