The various signaling techniques __________ completely overcome the moral hazard problem in the case of the small borrower, so that small business loans are generally __________-term.
A) can; long
B) can; short
C) cannot; long
D) cannot; short

Question

Quizplus · Accepted Answer

Signaling techniques cannot completely overcome the moral hazard problem in small borrower cases, leading to generally short-term loans to mitigate risk.

The Various Signaling Techniques __________ Completely Overcome the Moral Hazard