When you get a car loan, the lending institution usually sends a check directly to the car dealer. Such a practice
A) helps forestall moral hazard.
B) helps forestall adverse selection.
C) gives rise to moral hazard.
D) gives rise to adverse selection.
A
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In the absence of financial frictions, ________
A) interest rates for different borrowers move closely together B) all loans in the economy are transacted at a common interest rate C) the level of output is not affected by changes in the real interest rate D) an increase in inflation leads to a decrease in the real interest rate
One company has 90% of the market for cola soft drinks. An antitrust action against this company is likely to be defended (by the company) by the argument that
A. there is no substitute for cola soft drinks. B. the market share is not important. C. the relevant market is for cola soft drinks. D. the relevant market is not that for cola soft drinks but for all soft drinks.
The short-run aggregate supply curve:
A. ?Is a schedule showing the relationship between the price level and the quantity of real GDP supplied. B. ?Is typically upward sloping. C. reflects output prices changing relative to input prices. D. ?all of the above
Which of the following Nobel laureates became known for the study of asymmetric information?
A) Gary Becker B) Michael Spence C) George Akerlof D) Ronald Coase