The bank lending channel
A) emphasizes the role of interest rates in the money supply process.
B) emphasizes the importance of borrowers' net worth to the decision of lenders to grant loans.
C) emphasizes the behavior of bank-dependent borrowers.
D) is another name for the interest rate channel.

Question

Quizplus · Accepted Answer

The bank lending channel focuses on how monetary policy affects the lending capacity of banks, which in turn impacts borrowers who rely heavily on banks for credit.

The Bank Lending Channel