The Balance-Sheet Channel of Monetary Policy Works Because It Can

question 50

Multiple Choice

The balance-sheet channel of monetary policy works because it can:

• A) increase a borrower's asset value but not the burden of his/her liabilities.
• B) change the value of a borrower's assets and liabilities, but it can't change a borrower's net worth.
• C) increase a borrower's assets and reduce the cost of his/her liabilities.
• D) none of the answers given is correct.

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