If borrowers with the most risky investment projects seek bank loans in higher proportion to those borrowers with the safest investment projects, banks are said to face the problem of
A) adverse credit risk.
B) adverse selection.
C) moral hazard.
D) lemon lenders.
B
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National output is a function of ________
A) capital and saving B) technology, employment and demand C) labor and depreciation D) labor, technology and capital
In Econland population increased from 1 million to 1. 1 million, the number of employed workers increased from 500,000 to 600,000, but average labor productivity decreased from $20,000 per worker per year to $18,000 per worker per year. Total output in Econland ________ and the average standard of living ________.
A. increased; decreased B. decreased; increased C. decreased; decreased D. increased; increased
If the Fed were to set policy according to the Taylor rule, then if real GDP falls by 2 percent below potential GDP, the Fed should:
A. raise the real federal funds rate by 1 percentage point. B. reduce the real federal funds rate by 1 percentage point. C. raise the inflation rate by 1 percentage point. D. change the real federal funds rate until inflation hits the target rate of 4 percent.
Briefly describe the Sarbanes-Oxley Act and explain why it was passed
What will be an ideal response?