If the banking industry is unable to review a borrower's credit history, then the market will experience a bank failure caused by:
A) imperfect information.
B) imperfect competition.
C) public goods.
D) perfect information.

Question

Quizplus · Accepted Answer

Without the ability to review a borrower's credit history, banks will have imperfect information about the borrower's creditworthiness and may lend money to individuals who are unable to repay their loan obligations. This can lead to an increase in loan defaults and ultimately result in bank failures.

If the Banking Industry Is Unable to Review a Borrower's