Government regulations requiring firms that desire to sell securities in financial markets to disclose all available information
A) eliminate the adverse selection problem (when rigorously enforced).
B) increase the difficulty that young firms may have in raising funds.
C) eliminate the moral hazard problem in securities markets.
D) fail to eliminate the adverse selection problem, in part because they do not greatly reduce the difficulty that young firms have in raising funds.
B
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One part of the explanation for the persistently high rates of unemployment in Western Europe is:
A. labor market rigidities. B. productivity growth. C. increases in labor supply. D. increases in labor demand.
When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
If hiring one more worker causes the average product of labor to fall, then:
A. the marginal product of labor is less than the average product of labor. B. the marginal product of labor is equal to the average product of labor. C. the marginal product of labor is greater than the average product of labor. D. the marginal product of labor is negative.