Adverse selection refers to when:
A. one party to a transaction has more information than the other and this results in a bargaining dispute.
B. one party selects the wrong strategy and they are displeased with their selection.
C. one party to a transaction has more information than the other and transactions occur less frequently due to the information asymmetry.
D. neither party is willing to be party to a transaction because they don't have enough information.
Answer: C
You might also like to view...
Ersatz Kreme will sell its filling to Hunky Donuts only if Hunky Donuts agrees not to buy filling from other suppliers. This is an example of
a. price discrimination b. exclusive dealing c. a tying contract d. interlocking directorates e. a trust
In 2017, the U.S. median income for a family of four was about $61,000.
Answer the following statement true (T) or false (F)
According to the aggregate supply drawn under the monetarist view, which of the following would lead to a higher price level?
A. The purchase of bonds in the open market by the Fed. B. An increase in the discount rate. C. An increase in the reserve requirement. D. A decrease in the money multiplier.
Along a linear consumption function
A. the average propensity to consume rises with income, but the marginal propensity to consume falls with an increase in income. B. the average propensity to consume rises with a decrease in income. C. the marginal propensity to consume rises with an increase in income. D. both the average propensity to consume and the marginal propensity to consume rise with an increase in income.