The adverse selection problem in international investment means
A. that government officials may demand higher than the usual amount of bribes.
B. those in the highest levels of government are the most dishonest.
C. that the recipients of the funds may use the funds for other than the approved projects.
D. that those seeking funds for the riskiest projects are those most actively seeking the funds.
Answer: D
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Since 1925, the longest expansion in the United States lasted:
A. 21 months. B. 43 months. C. 60 months. D. 120 months.
Two countries will choose to specialize and trade only if:
A. the terms of trade fall between their opportunity costs for producing the goods on their own. B. the opportunity costs are the same for the two nations. C. the opportunity costs are astronomically high for producing the goods on their own. D. one country possesses the absolute advantage in both goods, but the comparative advantage in only one good.
As a result of the housing market crash overall output fell, and prices:
A. decreased because the magnitude of shift was larger for aggregate demand than it was for aggregate supply. B. increased because the magnitude of shift was larger for aggregate demand than it was for aggregate supply. C. decreased because the magnitude of shift was smaller for aggregate demand than it was for aggregate supply. D. increased because the magnitude of shift was smaller for aggregate demand than it was for aggregate supply.
If we knew that the price of goods rose, on average, by 5 percent last year and by 4 percent this year, we would know
a. nothing about the rate of inflation b. that the inflation rate is rising c. that the inflation rate is falling d. that we are in a stagflation e. that we are in a recession