Moral hazard can be a problem in lending since lenders share __________ in the __________ risk
A) proportionately; upside
B) proportionately; downside
C) disproportionately; upside
D) disproportionately; downside
D
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American households spend more of their incomes on goods than on services.
Answer the following statement true (T) or false (F)
In the IS-LM model, the two variables that are affected by the interest rate are
a. money supply and money demand. b. money supply and investment spending. c. money demand and consumption. d. money demand and investment spending. e. none of the above.
On the Fourth of July, there is no fireworks display in the small town of Yankeeville, even though it would be efficient for such a display to be produced. Which of the following statements is correct?
a. The lack of a fireworks display in Yankeeville arises because of an externality. b. The lack of a fireworks display in Yankeeville arises because the free-rider problem does not apply to goods such as fireworks displays. c. In deciding not to produce a fireworks display in Yankeeville, private individuals and private firms made decisions that were privately irrational. d. All of the above are correct.
As the firm in the above diagram expands from plant size #3 to plant size #5, it experiences:
A. diseconomies of scale. B. increasing returns. C. constant costs. D. economies of scale.