The moral hazard that can result from debt financing is mainly due to the:
A. borrower wanting to refinance the loan.
B. economy turning sour and the borrower defaulting.
C. borrower taking greater risk in hopes of obtaining a larger return.
D. borrower not working as hard once he or she obtains the loan.
Answer: C
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The graph shows costs and benefits of a mosquito control program, which is a public good:
a) What is the quantity of spraying that achieves efficiency? b) What is the political equilibrium if voters are well informed?
There are currently 1,000 firms in a competitive industry. Minimum long-run average cost is $80 and price $100. Explain what will happen to price, profit, and the number of firms in this industry over time.
What will be an ideal response?
The most accurate measure of inflation as it impacts the cost of living is the _______________ Price Index.
a. Personal b. Production c. Employment d. Consumer
Wages set above the equilibrium wage by
a. firms to increase morale are called collective bargaining wages. b. lawmakers to decrease cyclical unemployment are called minimum wages laws. c. firms to increase productivity are called efficiency wages. d. lawmakers to decrease the length of a job search are called efficiency wages.