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.
C. one party to a transaction has more information than the other and transactions occur less frequently due to the information asymmetry.
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Answer the following statement true (T) or false (F)
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