Question: How does an unanticipated decline in the price level cause a drop in lending? A. A decline in the price level reduces the moral hazard

How does an unanticipated decline in the price level cause a

How does an unanticipated decline in the price level cause a drop in lending? A. A decline in the price level reduces the moral hazard associated with borrowing firms B. A decline in the price level lowers the nominal value of loan contracts that have already been made C. A decline in the price level raises the real value of borrowing firms' liabilities while lowering the firms' real net worth D. A decline in the price level does not affect lending

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