Multiple Choice
In the two-period model,the nature of the asymmetric information is that
A) only the bank knows who the bad borrowers are.
B) only borrowers know whether they are bad or not.
C) only borrowers know the value of their collateral.
D) only banks can value the collateral.
E) only consumers know their income when it is received.
Correct Answer:
Verified
Correct Answer:
Verified
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