A major function of incentive payments, guarantees, and signals is to enable markets to overcome the problem of
A) irrational forecasting.
B) efficient forecasting.
C) private information.
D) public information.

Question

Quizplus · Accepted Answer

Incentive payments, guarantees, and signals are mechanisms used to address the issue of private information, where one party in a transaction has more or better information than the other. These tools help align interests and reduce information asymmetry in markets.

A Major Function of Incentive Payments, Guarantees, and Signals Is