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Everything Else Held Constant,when Financial Frictions Increase,the Real Cost of Borrowing

Question 99

Multiple Choice

Everything else held constant,when financial frictions increase,the real cost of borrowing ________ so that planned investment spending ________ at any given inflation rate.


A) increases;falls
B) decreases;falls
C) decreases;rises
D) increases;rises

Correct Answer:

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