Author Question: Pooling of risk occurs when depository institutions A) make assets more liquid. B) specialize in ... (Read 93 times)

crazycityslicker · **on:** Jun 29, 2018

Pooling of risk occurs when depository institutions

A) make assets more liquid.
B) specialize in loaning only to good borrowers.
C) bring lenders together.
D) lend to a variety of different borrowers.

Question 2

If the government begins to run a larger budget deficits, then assuming there is no Ricardo-Barro effect, the demand for loanable funds ________ and the real interest rate ________.

A) decreases; falls
B) decreases; rises
C) increases; rises
D) increases; falls