One result of asymmetric information in the market for bank loans is that
a. few loans are offered
b. few bad loans are made
c. more bad loans than good loans may be made
d. lenders benefit at the expense of borrowers
e. the interest on good loans will be higher than otherwise
QUESTION 2On average, about half the labor force in developing countries works in agriculture, versus only about 3 percent in industrial market countries.
a. True
b. False
QUESTION 3One result of asymmetric information in the market for used cars is that
a. few used cars are offered on the market
b. few lemons are sold
c. more lemons may be offered for sale than good cars
d. buyers benefit at the expense of sellers
e. good cars will sell for more than they are worth
QUESTION 4Compared to industrial market countries, developing countries usually have
a. exports consisting mostly of agricultural products and raw materials
b. faster population growth
c. higher unemployment
d. higher rates of illiteracy
e. All of the answers are correct
QUESTION 5A service like CARFAX, which provides a used car buyer with the complete history of a used car, is profitable because of the problem of moral hazard.
a. True
b. False
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