The risk that a borrower has a greater understanding about their potential future behavior than a potential lender is known as ________

A) the problem of adverse selection
B) the problem of moral hazard
C) ornamental torsion
D) the asymmetric innovation problem


B

Economics

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The initial supply and demand curves for a good are illustrated in the above figure. If there is a rise in the price of a factor of production used to produce the good, then the new equilibrium price

A) is less than $6. B) is $6. C) is more than $6. D) could be less than, equal to, or more than $6.

Economics

A market in which orders exist in large volume is said to have

A) depth. B) breadth. C) resiliency. D) efficiency.

Economics

It is possible for one person to have an absolute advantage in two tasks and a comparative advantage in only one

a. True b. False

Economics

Each member of a cartel

a. faces a temptation to cheat on the agreement because lowering its price slightly below the established price will usually increase the firm's sales and profit. b. faces a temptation to cheat on the agreement because raising its price slightly above the established price will usually increase the firm's sales and profit. c. has no temptation to cheat on the agreement because lowering its price slightly below the established price will usually have no impact on the firm's sales and profit. d. has no temptation to cheat on the agreement because raising its price slightly above the established price will usually decrease the firm's sales and profit. e. has no temptation to cheat on the agreement because lowering its price slightly below the established price will usually lower the firm's sales and profit.

Economics