Credit rationing and the financial accelerator are responsible,in part,for
A) the significant volatility of gross private investment.
B) the significant volatility of real personal consumption.
C) smoothing gross private investment during severe recessions.
D) smoothing real personal consumption during expansions.

Question

Quizplus · Accepted Answer

Credit rationing and the financial accelerator can lead to significant volatility in gross private investment, as firms may struggle to obtain the necessary financing to invest in new projects or expand their operations during economic downturns. This can exacerbate the severity of recessions and lead to a more volatile economic environment.

Credit Rationing and the Financial Accelerator Are Responsible,in Part,for