PLEASE JUST DO PART B

8. (10 points) a. (5 points) Explain why a perception of lower risk may increase bank leverage? Use an example to describe why a risk-averse lender may be willing to lend more when the perception of risk is lower. b. (5 points) Some economists argue that paradoxically the period of great moderation and financial stability of the 1990's and early 2000's played a critical role in the build-up to the Global Financial Crisis. Why? 8. (10 points) a. (5 points) Explain why a perception of lower risk may increase bank leverage? Use an example to describe why a risk-averse lender may be willing to lend more when the perception of risk is lower. b. (5 points) Some economists argue that paradoxically the period of great moderation and financial stability of the 1990's and early 2000's played a critical role in the build-up to the Global Financial Crisis. Why