Multiple Choice
In the two-period model with asymmetric information,the presence of bad borrowers who always default
A) makes good borrowers better off.
B) matters only for the loan interest rate faced by bad borrowers.
C) affects the equilibrium profits of banks.
D) affects good borrowers adversely.
Correct Answer:
Verified
Correct Answer:
Verified
Q14: In the two-period model with limited commitment,if
Q15: If the proportion of bad borrowers increases,<br>A)
Q16: Collateral is used in all of the
Q17: For a consumer bound by the collateral
Q18: Collateralizable wealth is<br>A) wealth in non-tangible assets.<br>B)
Q20: The phenomenon that some consumers pay a
Q21: If a consumer borrows at an interest
Q22: The negative impact of the loss of
Q23: Asymmetric information means<br>A) some market participants have
Q24: Which of the following is not a