In the early 2000s, the government passed laws requiring banks and mortgage brokers to disclose the terms of home loans. Which statement about this action is true?
A)It was an attempt to solve the information asymmetry problem, but it did not work as intended.
B)It solved the information asymmetry problem and led to an improvement in the housing market.
C)The intention of the action was to screen out risky banks and mortgage brokers.
D)It signaled to consumers that the government cared about the value of their homes.

Question

Quizplus · Accepted Answer

The laws were indeed an attempt to solve the information asymmetry problem by ensuring that consumers had all the necessary information about the terms of their home loans. However, despite these efforts, the housing market still faced significant challenges, indicating that the solution did not work as intended.

In the Early 2000s, the Government Passed Laws Requiring Banks