When the value of loans begins to drop, the net worth of financial institutions falls causing them to cut back on lending in a process called

Outline the principal sources of the debt crisis

What will be an ideal response?

Which of the following statements is true?

A) Both nominal and real interest rates are procyclical and leading. B) Both nominal and real interest rates are procyclical and lagging. C) Nominal interest rates are procyclical and real interest rates are countercyclical. D) Nominal interest rates are procyclical and real interest rates are acyclical.