How does adverse selection affect the participation of small- and medium-sized firms in the stock market?
What will be an ideal response?
Many small- and medium-sized firms will be unwilling to issue shares of stock for a price below its true value. Many will be unable to find investors who will be willing to purchase their stock due to fears about adverse selection.
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A cost due to an increase in activity is called
A) an incentive loss. B) a marginal cost. C) a negative marginal benefit. D) the total cost.
In the above figure, if the single-price monopolist charges a price that maximizes its profits, consumer surplus is
A) area hacd. B) area bac. C) area jae. D) area jbce.
The goal of endogenous growth theory is to explain ________
A) supply and demand in individual markets B) the causes of technological advance C) the business cycle D) the relationship between economic growth and the rates of inflation and unemployment
The unemployment rate was increasing from 6 percent to 7 percent could be interpreted as an increase in the natural rate of
a. inflation. b. unemployment. c. economic growth. d. aggregate supply.