During Recessions,the Value of Collateral Decreases and Corporate Profits Decrease,so

question 40

Multiple Choice

During recessions,the value of collateral decreases and corporate profits decrease,so firms do not have cash to finance new investment projects.Therefore,credit rationing depends on the state of the economy.This situation is known as the

• A) risk acceptance cost.
• B) lender's dilemma.
• C) default premium.
• D) financial accelerator.

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Definitions:

Implicit Attitudes

Unconscious beliefs or feelings towards objects, people, or situations that can influence behavior and perceptions.

Accessible

Easily reached or obtained; easy to understand or appreciate.

Automatically

Occurring involuntarily or without conscious thought, as in actions or processes in the human body or computers.

Conformity

The act of matching attitudes, beliefs, and behaviors to group norms, policies, or societal expectations.