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

Question 79

Multiple Choice

During the expansion phase of the business cycle,business firms become optimistic about their future earning capacity as do banks.Nominal interest rates rise during expansions.Investment lending could be expected to


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

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