People who apply for loans know more about their ability to repay the loan than the lenders do. This is an example of:
A. asymmetric information.
B. public information.
C. a negative externality.
D. a community rating.
Answer: A
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Assuming all else equal, a decrease in the real interest rate will cause:
A) an upward movement along the credit supply curve. B) a downward movement along the credit supply curve. C) the credit supply curve to shift to the right. D) the credit supply curve to shift to the left.
Whenever somebody deposits a check from bank A into a checkable deposit at bank B, bank A's reserves ________ and bank B's reserves ________
A) increase; decrease B) increase; increase C) decrease; decrease D) decrease; increase E) do not change; do not change
Bonds receiving one of the top four ratings are considered:
A) junk B) speculative C) AAA D) investment grade
For the past 30 years, labor's share of national income ________ while labor productivity ________
A) fell dramatically, increased B) remained roughly constant, dropped C) remained roughly constant, increased D) increased modestly, dropped