Multiple Choice
Deflation can cause widespread bank crises for all of the following reasons except:
A) a decline in the value of borrowers' net worth but not their liabilities.
B) borrowers' default rates increase.
C) bank balance sheets deteriorate as the level of economic activity decreases.
D) information asymmetry problems decrease during deflationary periods.
Correct Answer:
Verified
Correct Answer:
Verified
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