If there are fewer bad borrowers in the population when there is asymmetric information
A) the interest rate spread declines.
B) the interest rate spread increases.
C) the value of collateral increases.
D) banks make positive profits.
E) good borrowers are worse off.
Correct Answer:
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Q4: In a simple model of credit imperfections,
Q5: If the proportion of bad borrowers increases,
A)
Q6: Collateralizable wealth is
A) wealth in non-tangible assets.
B)
Q7: When there are credit-market imperfections, an increase
Q8: If consumers face higher interest rates when
Q10: The 1990-1992 recession was unlikely to be
Q11: Limited commitment means
A) one cannot credibly promise
Q12: Asymmetric information means
A) some market participants have
Q13: When consumers lend at a lower rate
Q14: The default premium increases when there is
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