________ occurs when an informed person takes an action to send information to an uninformed person,and ________ occurs when an uninformed person creates an incentive for an informed person to reveal private information.
A) Moral hazard; adverse selection
B) Adverse selection; moral hazard
C) Signaling; screening
D) Screening; signaling
E) Pooling; separating

Question

Quizplus · Accepted Answer

Signaling occurs when an informed party takes action to reveal information to an uninformed party, while screening is the process by which an uninformed party seeks to induce the informed party to reveal information.

________ Occurs When an Informed Person Takes an Action to Send