In the credit market model with limited commitment, suppose that a consumer's collateral constraint is binding. Then, suppose that the value of collateral rises. Determine and discuss what the consumer's response is, and explain.
In the credit market model with limited commitment, suppose that a consumer's collateral constraint is binding. Then, suppose that the value of collateral rises. Determine and discuss what the consumer's response is, and explain.
Chapter1: Financial Statements And Business Decisions
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collateral constraint is binding. Then, suppose that the value of collateral rises. Determine and
discuss what the consumer's response is, and explain."
Transcribed Image Text:In the credit market model with limited commitment, suppose that a consumer's
collateral constraint is binding. Then, suppose that the value of collateral rises. Determine and
discuss what the consumer's response is, and explain.
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