Multiple Choice
In the basic AD-SRAS model, the assumption is made that
A) bank loans are imperfect substitutes for other forms of finance.
B) all sources of finance are perfect substitutes.
C) the real interest rate overstates the cost of funds to borrowers.
D) the real interest rate understates the cost of funds to borrowers.
Correct Answer:
Verified
Correct Answer:
Verified
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