If bankers have reason to feel optimistic about the future, they may become very eager to loan money. If insufficient regulations are in place, this could most likely cause what? A higher percentage of loans in default, as riskier borrowers are attracted to easy loans A credit crunch, which will reduce household consumption and business investment spending, leading to a decline in real output Very little change in the short run, as higher interest rates will simply compensate A credit crunch, as riskier borrowers take out loans