Which of the following is NOT an economic benefit of depository institutions?
A) They pool risk
B) They borrow long and lend short
C) They reduce the cost of monitoring borrowers
D) They create liquidity

Question

Quizplus · Accepted Answer

Depository institutions actually borrow short and lend long, meaning they take in short-term deposits and use that money to make long-term loans, such as mortgages. This is known as maturity transformation and is a key function of depository institutions.

Which of the Following Is NOT an Economic Benefit of Depository