When the value of loans begins to drop,the net worth of financial institutions falls causing them to cut back on lending in a process called
A)deleveraging.
B)releveraging.
C)capitulation.
D)deflation.

Question

Quizplus · Accepted Answer

When the value of loans begins to drop, financial institutions' net worth falls, resulting in a reduction in lending, a process known as deleveraging.

When the Value of Loans Begins to Drop,the Net Worth