When households and businesses have to sell illiquid assets to meet current obligations, they are said to be experiencing
A)disintermediation.
B)financial distress.
C)moral hazard.
D)adverse selection.

Question

Quizplus · Accepted Answer

Financial distress refers to a situation where households and businesses are forced to sell illiquid assets (such as property or long-term investments) to meet current obligations due to financial difficulties. This can lead to losses and decreased net worth, potentially worsening their financial situation. Disintermediation, moral hazard, and adverse selection refer to different concepts related to financial behavior and risk.

When Households and Businesses Have to Sell Illiquid Assets to Meet