The credit channel of monetary policy transmission works in two ways. On the supply side of the credit market, tight monetary policy leads to ________ lending by banks; on the demand side of the credit market, tight monetary policy leads to ________ in the creditworthiness of borrowers.
a. reduced; a decrease
b. increased; an increase
c. reduced; an increase
d. increased; a decrease
Answer: A
FIN 201
- Whether real seignorage revenue increases when the rate of money growth increases depends on whether
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