Question
Which of the following statements is incorrect? A. Banks take short-term deposits and make long-term loans. B. Everything else being equal, banks are more likely
Which of the following statements is incorrect?
A. Banks take short-term deposits and make long-term loans. B. Everything else being equal, banks are more likely to get into problems when interest rate are increasing rather than when they are decreasing. C. Low interest rate that last for a long time make financial system to accumulate many low paying assets and increase the risk they face when interest rates increase. D. The SEC has motivation to create lower leverage in financial system than what we would have without any government interference.
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