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21-12-2022
Business

Answered

debt deflation is when a) rising interest rates worsen adverse selection and moral hazard problems. b) an economic downturn causes the price level to fall and a deterioration in net worth of firms because of the increased burden of long term indebtedness. c) lenders reduce their lending due to declining stock prices (equity deflation) that lowers the value of collateral. d) corporations pay back their loans before the scheduled maturity date.

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