Which of the following could the lemons problem, applied to financial markets, explain?
A. An average interest rate that is too high for the actual risk obtained
B. High quality potential borrowers relying more on internally generated funds to finance investment
C. Lenders seeing a disproportionate share of high quality loan applicants
D. Profits for many lenders increasing significantly
Answer: B
You might also like to view...
When the United States imports goods from the rest of the world, which of the following parties is harmed?
i. domestic producers of the good ii. domestic consumers of the good iii. foreign producers of the good A) i only B) ii only C) iii only D) i and iii E) i, ii, and iii
Price floors are primarily intended to help
a. No one b. Consumers c. Producers d. Government
Discuss some of the reasons behind downward stickiness of wages and prices
With a lump-sum tax, the
a. marginal tax rate is always less than the average tax rate. b. average tax rate is always less than the marginal tax rate. c. marginal tax rate falls as income rises. d. marginal tax rate rises as income rises.