If a banker lacks enough information to determine exactly which applicants for a loan are good risks and which are bad risks, then he faces a(n) __________ problem
A) moral hazard
B) adverse selection
C) market failure
D) disintermediation
B
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How many broad categories are used by economists to define the GDP?
A) 3 B) 4 C) 6 D) 8
Stockholders are residual claimants, meaning that they
A) have the first priority claim on all of a company's assets. B) are liable for all of a company's debts. C) will never share in a company's profits. D) receive the remaining cash flow after all other claims are paid.
In the "cost of capital channel" of monetary policy, a lower interest rate __________ spending
A) raises consumption B) raises investment C) lowers consumption D) lowers investment
Use the aggregate expenditures model and assume the marginal propensity to consume (MPC) is 0.90 . A decrease in government spending of $1 billion would result in a decrease in GDP of:
a. $0. b. $0.9 billion. c. $1.0 billion. d. $9.0 billion. e. $10.0 billion.