Exam 8: An Economic Analysis of Financial Structure

Of the following sources of external finance for American nonfinancial businesses,the least important is

Financial intermediaries' low transaction costs allow them to provide ________ services that make it easier for customers to conduct transactions.

That only large,well-established corporations have access to securities markets

A lesson of the Enron collapse is that government regulation

The analysis of how asymmetric information problems affect economic behavior is called ________ theory.

One financial intermediary in our financial structure that helps to reduce the moral hazard from arising from the principal-agent problem is the

One reason China has been able to grow so rapidly even though its financial development is still in its early stages is

The presence of ________ in financial markets leads to adverse selection and moral hazard problems that interfere with the efficient functioning of financial markets.

Property that is pledged to the lender in the event that a borrower cannot make his or her debt payment is called