The problem faced by the lender that the borrower may take on additional risk after receiving the loan is called
A) adverse selection.
B) moral hazard.
C) transactions costs.
D) diversification.
B
You might also like to view...
One year, the government boosted regulated taxi fares in New York City by 15 percent with the expectation that the total revenue from taxi rides would also increase by 15 percent
The taxi commission that authorized this fare increase must have believed that the demand for taxi service was A) elastic, but not perfectly elastic. B) inelastic, but not perfectly inelastic. C) unit elastic. D) perfectly inelastic.
The two kinds of yields used in the Treasury bill market are the
A) coupon equivalent yield and yield on a discount basis. B) face yield and discount yield. C) nominal yield and real yield. D) yield to maturity and coupon equivalent yield.
The stagflation in the United States during the 1974–1975 period can be attributed to
A. increases in real GDP due to high levels of defense spending. B. tight monetary and fiscal policies of the Nixon–Ford administrations. C. rapid increases in petroleum prices, poor harvests, and the removal of wage and price controls. D. budget deficits by the federal government and increasing trade deficits by the United States.
Occurs whenever the quantity supplied is greater than the quantity demanded
What will be an ideal response?