A. The amplification of shocks through endogenous changes in credit conditions and asset prices
B. Only the direct interest-rate channel
C. Only the exchange-rate channel
D. The automatic stabilisers in the fiscal system
Answer: Option A
Solution (By JKSSB Mock Tests)
The financial accelerator describes how deteriorations in borrowers’ balance sheets raise external finance premia, further reducing spending and amplifying the effects of the original shock.
Explanation:
The Gini Coefficient measures the extent of income or wealth inequality in a population. A value of 0 represents perfect equality and 1 represents perfect inequality.
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