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Homework answers / question archive / a) Suppose that the government takes action to improve the solvency of the financial system
a) Suppose that the government takes action to improve the solvency of the financial system. If the government's action is successful, and banks become more willing to lend, both to one another and to nonfinancial firms, what is likely to happen to the premium? Can we consider financial policy as a kind of macroeconomic policy?
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