People who apply for loans know more about their ability to repay the loan than the lenders do. This is an example of:
A. asymmetric information.
B. public information.
C. a negative externality.
D. a community rating.
Answer: A
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
Tina's marginal utility of her first piece of cake is 15, while Jerry's marginal utility of his first piece of cake is 24 . An economist would conclude that
a. Tina likes cake more than Jerry likes cake b. Jerry likes cake more than Tina likes cake c. Tina likes cake less than Jerry likes cake d. Jerry likes cake less than Tina likes cake e. we can't judge who values cake more
A market system solves the
a. "what" and "how" decisions but not the "to whom." b. "what" and "to whom" decisions but not the "how." c. "how" and "to whom" decisions but not the "what." d. "what," "how," and "to whom" decisions.
Following deregulation in the airline industry,
A. small carriers have gone out of business but large carriers have not. B. large carriers have gone out of business but small carriers have not. C. both large carriers and small carriers have gone out of business. D. neither large carriers nor small carriers have gone out of business.