An Increase in Financial Frictions Results in ________

question 35

Multiple Choice

An increase in financial frictions results in ________.

• A)an increase in output and inflation
• B)a rise in the interest rate set by monetary policy
• C)a decline in the real interest rates faced by households and firms
• D)a decline in the interest rate set by monetary policy

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Definitions:

Contributory Negligence

A legal doctrine under which a party's own negligence contributes to their harm and may limit or bar their recovery for damages.

Comparative Negligence

A principle of tort law that compares the fault of each party involved in an accident and apportions damages accordingly.

Res Ipsa Loquitur

A legal doctrine that infers negligence from the very nature of an accident or injury, in the absence of direct evidence.

Strict Liability

A legal doctrine holding an individual or entity responsible for damages or injury regardless of fault or intent.