Firms have a harder time getting loans during periods of deflation because:
A. deflation aggravates information problems in ways dissimilar to inflation.
B. deflation decreases the net worth of firms.
C. for a firm seeking a loan, deflation increases the real amount of their liabilities without increasing the real value of their assets.
D. all of the answers given are correct.
Answer: D
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Which of the following is part of the market structure for monopolistic competition?
A) barriers to entry B) a large number of firms compete C) each firm produces a differentiated product D) Both answers B and C are correct.
If a corporation's retained earnings are expected to create future profits, the market price of the firm's stock will ________ and create a ________ for stockholders if the stock is sold
A) decrease; capital gain B) decrease; loss of wealth C) increase; loss of wealth D) increase; capital gain
Which of the following is a difference between an income tax and an excise tax on gasoline? a. An income tax exemplifies the ability to pay principle, while an excise tax on gasoline exemplifies the benefit principle. b. An income tax is based on a marginal tax rate, while an excise tax on gasoline is based on an average tax rate. c. An income tax is proportional, while an excise tax on
gasoline is progressive. d. An income tax increases consumer surplus, while an excise tax on gasoline increases producer surplus.
Permanent income is
A. expected future income. B. the average level of expected future income. C. current income. D. accumulated wealth.