The Credit Spread Is Countercyclical and Coincident,suggesting That a Sudden

question 47

Multiple Choice

The credit spread is countercyclical and coincident,suggesting that a sudden increase in financial frictions is most likely ________.

• A)when the economy has been expanding for some time
• B)after the economy has turned into a recession
• C)during the recovery phase of the business cycle
• D)when expected inflation is declining