Moral hazard arises from
A) the difficulty of distinguishing good-risk borrowers from bad-risk borrowers.
B) the likelihood that bad-risk borrowers are more likely to accept a loan than are good-risk borrowers.
C) savers' difficulties in monitoring borrowers.
D) borrowers' difficulties in locating savers.
C
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Scarcity affects only those who are in need
Indicate whether the statement is true or false
________ is called an implicit cost, while ________ is called an explicit cost
A) A nonmonetary opportunity cost; a cost that involves spending money B) An accounting cost; an economic cost C) A production cost; a sales cost D) An actual cost; a hypothetical cost
With floating exchange rates, BOP equilibrium is restored by
A) trade restrictions. B) earnings from foreign investments. C) exchange rate changes. D) All of the above.
The more elastic a monopolistic competitor's long-run demand curve, the:
A. greater its excess capacity. B. higher its price relative to that of a pure competitor having the same cost curves. C. lower its long-run profit. D. lower its average total cost at its profit-maximizing level of output.