The broad credit channel of a credit crunch is when
A) all banks restrict credit to borrowers
B) banks restrict lending to small and medium size firms
C) even large firms find it hard to borrow due to reduced collateral values
D) both firms and households find it hard to borrow
E) Central Banks tighten credit conditions too much

Question

Quizplus · Accepted Answer

The broad credit channel refers to a situation where even large firms face difficulties in borrowing due to reduced collateral values, impacting their ability to secure loans.

The Broad Credit Channel of a Credit Crunch Is When