Exam 8: An Economic Analysis of Financial Structure

Government regulations designed to reduce the moral hazard problem include ________.

Which of the following is NOT one of the four types of restrictive covenants?

With regard to external sources of financing for nonfinancial businesses in Canada,which of the following are accurate statements?

Because of the "lemons problem" the price a buyer of a used car pays is ________.

The name economists give the process by which stockholders gather information by frequent monitoring of the firm's activities is ________.

Liquidity service offered by financial intermediary make it ________.

One purpose of regulation of financial markets is to ________.

The principal-agent problem ________.

A clause in a debt contract requiring that the borrower purchase insurance against loss of the asset financed with the loan is called a ________.

Because information is scarce ________.

The principal-agent problem ________.

Explain the problem of asymmetric information,adverse selection and moral hazard,and why these problems are important for the financial system.

Government regulations require publicly traded firms to provide information,reducing ________.

If bad credit risks are the ones who most actively seek loans then financial intermediaries face the problem of ________.

Because of the adverse selection problem,________.

Financial intermediaries develop ________ in things such as computer technology which allows them to lower transactions costs.

The remedies for the adverse selection include all but the following.

The ________ problem helps to explain why the private production and sale of information cannot eliminate ________.

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

If all the students in your class pool their money in order to buy one bond and share its return accordingly,in order to eliminate transaction costs,this is an example of ________.