During the Recession Phase of the Business Cycle,business Firms Become

Multiple Choice

During the recession phase of the business cycle,business firms become pessimistic about their future earning capacity as do banks.Nominal interest rates fall during recessions.Investment lending could be expected to

A) rise if the change in future earnings is thought to be greater than the change in interest payments.
B) stay the same.
C) fall.
D) fall if the change in future earnings is thought to be greater than the change in interest payments.