Question

Macroprudential supervision policies try to prevent a leverage cycle by changing capital requirements so that they ________ during an expansion and ________ during a downturn.A) increase; decrease
B) increase; increase

C) decrease; increase

D) decrease; decrease

Answer 1

Answer:

so correct option is A) increase; decrease

Explanation:

solution

• Macroeconomic policies or rules primarily target the overall financial risk management of the company. It seeks to control risk through various steps and actions.

• Even in the given case,

• Increasing capital requirements during expansion is great in performance expansion and performance is not good because capital requirements are not reduced during the period.

so correct option is A) increase; decrease