Author Question: During the Great Depression, as real interest rates rose, good credit risks were less likely to seek ... (Read 55 times)

anshika · **on:** Jun 30, 2018

During the Great Depression, as real interest rates rose, good credit risks were less likely to seek loans. This process illustrates the phenomenon of ________.

A) adverse selection
B) moral hazard
C) poor monetary policy
D) debt deflation

Question 2

Financial innovations such as direct deposit of paychecks, electronic payment of bills, and automated teller machines (ATMs) have likely ________.

A) had minimal effect on M1 and M2
B) reduced the size of M2 relative to M1
C) increased both M1 and M2 relative to GDP
D) caused the growth rates of M1 and M2 to become more stable
E) reduced the size of M1 relative to M2