Financial frictions are not a problem for the economy, since they do not affect the safe policy

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Financial frictions are not a problem for the economy, since they do not affect the safe policy rate which is controlled by the central bank.” Is this statement true, false, or uncertain? Explain your answer.

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Economics of Money Banking and Financial Markets

ISBN: 978-0134733821

12th edition

Authors: Frederic S. Mishkin

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Question Posted: Nov 30, 2018 08:07 AM

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Financial frictions are not a problem for the economy, since they do not affect the safe policy

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False When financial frictions increase they lead to an increase in m...View the full answer

Economics of Money Banking and Financial Markets

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