Adverse selection is the process by which
A. full-disclosure becomes impossible.
B. adversaries communicate negative messages.
C. "undesirable" members of a particular market are less likely to participate in exchange.
D. "undesirable" members of a particular market are more likely to participate in exchange.
Answer: D
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Normative statements are statements about
A) prices. B) quantities. C) what is. D) what ought to be.
If the goods' money prices do not change, a depreciation of the dollar against the pound
A) makes British sweaters cheaper in terms of American jeans. B) makes British sweaters more expensive in terms of American jeans. C) makes American jeans more expensive in terms of British sweaters. D) doesn't change the relative price of sweaters and jeans. E) makes British jeans more expensive in Britain.
Which of the following events must cause equilibrium price to fall?
a. demand increases and supply decreases b. demand and supply both decrease c. demand decreases and supply increases d. demand and supply both increase
If there is a surplus in the market for loanable funds, then the interest rate
a. rises, so national saving rises. b. rises, so national saving falls. c. falls, so national saving rises. d. falls, so national saving falls.