A borrower's willingness to sign a personal guarantee is
A) one form of the moral hazard problem.
B) one form of the adverse selection problem.
C) a signal of a high-quality borrower.
D) a signal of a low-quality borrower.
C
You might also like to view...
Everything else held constant, an autonomous tightening of monetary policy will cause
A) the quantity of aggregate demand to increase. B) the quantity of aggregate demand to decrease. C) aggregate demand to increase. D) aggregate demand to decrease.
Newly-privatized firms in Eastern Europe require __________ investor monitoring, which suggests the relative desirability of a __________-oriented financial system
A) heavy; banking B) heavy; markets C) little or no; banking D) little or no; markets
Which of the following is not a type of merger?
a. b and e. b. Diversified merger. c. Horizontal merger. d. Vertical merger. e. Conglomerate merger.
A family friend is shopping for an exclusive Vera Wang wedding gown for $8,000 but feels that the price is excessive. She argues that the company should lower prices not only to benefit customers but also to increase the company's revenues and profits. What has she assumed about the price elasticity of demand for these gowns? Is her assumption likely to be correct or incorrect? Why?