Moral hazard is a barrier to financing global growth because
A) of the differences between financing using loans, portfolio investment and foreign direct investment.
B) there is the possibility that the funds are used for riskier behavior than the lender agreed to.
C) firms sometimes have trouble determining whether they need funds or not.
D) if investors have trouble identifying high-risk firms they may be unwilling to give money to creditworthy firms.
B
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Assume that the cost of producing a hardback book is roughly equivalent to producing a paperback book. Explain how and why then do publishing companies charge higher prices for the hardback book and a much lower price for the paperback book
What will be an ideal response?
Milton Friedman and Edmund Phelps questioned
A) the use of expectations in the Phillips curve. B) the stability of the relationship between inflation and unemployment. C) the existence of a natural rate of unemployment. D) the existence of a full-employment level of output.
Decreasing returns to scale
A) indicate that an increase in all inputs by some proportion will result in a decrease in output. B) must always occur at some point in the production process. C) are directly related to the law of diminishing returns. D) All of the above are true. E) None of the above is true.
Over the range of diminishing marginal product, if the variable input to a firm is increased: a. output will increase more than in proportion to the increase in the input
b. output will increase less than in proportion to the increase in the input. c. output will increase exactly in proportion to the increase in the input. d. output will increase more than in proportion to the increase in the inputs at first, but it will eventually increase less than in proportion to the increase in the input.