EMP can expand lending due to an increase in the net worth of firms and an increase in asymmetric information issues.

Question

Quizplus · Accepted Answer

EMP (Equity Market Pressure) can expand lending due to an increase in the net worth of firms, as it reduces the risk perceived by lenders, but an increase in asymmetric information issues would likely reduce lending because it increases the uncertainty and risk for lenders.

EMP Can Expand Lending Due to an Increase in the Net