Fluctuations in yields is one means by which the economy allocates scarce credit.

Question

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Fluctuations in yields (i.e. interest rates) affect the availability and cost of credit, which in turn affects the allocation of credit in the economy. When yields are high, borrowers may have access to less credit or may need to pay a higher cost for credit, while when yields are low, borrowers may have access to more credit at a lower cost. This allocation of credit is an important function of the economy in allocating scarce resources.

Fluctuations in Yields Is One Means by Which the Economy