What Meant by Deleveraging? What Role Does It Play in a Credit

question 78

Essay

What meant by deleveraging? What role does it play in a credit crunch?

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Definitions:

Credible Threat

A declaration of intended action or punishment that is believable and realistic enough to influence the behavior of others.

Equilibrium

A state in which all forces or influences are balanced, such as in a market when supply equals demand.

Dominant Strategy

In game theory, an approach that remains optimal for a participant, no matter what tactics are adopted by the others.

Entry-Deterring Price

A strategy involving setting prices low enough to prevent new competitors from entering the market.