1

With both direct and indirect finance, the borrower generally has more information than the lender about the risk involved. What term is used for this and what two types of risk can occur?

What do lenders do about reducing each of these two types of lending risk?

2

Governments provide safety nets to reduce the likelihood of bank runs and contagions because these have adverse effects on the financial system and the economy. What are the two main government provided safety nets? Do they have a downside and if so what may result?

3

In business forecasting using multiplicative decomposition which data component or factor do you use to forecast sales outcome with macroeconomic change?

4

How does government intervention in a negative short-run supply shift usually suffer from the time-inconsistency? what is an example of a short-run supply decrease and government monetary policy intervention

5

Government debt will not burden the future generations that must repay it if it is used to finance which types of investments? Even with these more productive investment types what is the downside of government debt expansion?