Firms Have a Harder Time Getting Loans During Periods of Deflation

question 95

Multiple Choice

Firms have a harder time getting loans during periods of deflation because:

• A) deflation aggravates information problems in ways dissimilar to inflation.
• B) for a firm seeking a loan, deflation increases the real amount of their liabilities without increasing the real value of their assets.
• C) deflation decreases the net worth of firms.
• D) all of the answers given are correct.

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Definitions:

Species Specific

Characteristics or behaviors that are unique to a particular species.

Hybrid Inviability

A postzygotic barrier where offspring resulting from the mating of two different species die prematurely due to genetic incompatibilities.

Alloploid

An organism having two or more sets of chromosomes that are derived from two different species.

Chromosomes

Proteinous, string-like entities situated in the cell nucleus of animals and plants, containing a single DNA molecule.