Adverse selection refers to the

A) use of statistical discrimination in making loans.
B) possession of information by one party in a financial transaction not known by the other party.
C) likelihood that a potential borrower may use the funds that he receives for unworthy, high risk projects.
D) possibility that the borrower may engage in riskier behavior after the loan is obtained.


C

Economics

You might also like to view...

In general, what is the final result of trade barriers?

What will be an ideal response?

Economics

When a monopolist is able to sell its product at different prices to different customers, it is likely engaging in: a. quality-adjusted pricing. b. price discrimination

c. price differentiation. d. illegal activities.

Economics

A demand curve:

A. shows the relationship between price and quantity supplied. B. indicates the quantity demanded at each price in a series of prices. C. graphs as an upsloping line. D. shows the relationship between income and spending.

Economics

Refer to the information provided in Table 23.4 below to answer the question(s) that follow.  Table 23.4Refer to Table 23.4. Society's MPC is

A. 0.1. B. 0.2. C. 0.75. D. 0.9.

Economics