________ refers to a decrease in the willingness of banks to ...

[piesebel]

________ refers to a decrease in the willingness of banks to lend, while an impairment of the ability of nonfinancial firms to borrow is a consequence of ________.
 
  A) Adverse selection; moral hazard
  B) Deleveraging; debt deflation
  C) Fire sales; a bank panic
  D) The shadow banking system; agency theory

Question 2

Which of the following is true with regard to the supply of money?
 
  A) an open market sale of government securities will increase liquidity
  B) an open market purchase of government securities will decrease liquidity
  C) liquidity and the money supply are directly related
  D) all of the above
  E) none of the above

[karmakat49]

Answer to Question 1

B

Answer to Question 2

C