Asymmetric information is:
A) information revealed by economic agents turns out to be wrong.
B) inflation forecasts are systematically to high or too low.
C) some economic agents have more information than others.
D) the government knows less about the economy than households and firms.

Question

Quizplus · Accepted Answer

Asymmetric information refers to a situation where some economic agents, such as sellers or lenders, have more information about a transaction than others, such as buyers or borrowers. This imbalance of information can lead to market failures and inefficiencies, such as adverse selection or moral hazard.

Asymmetric Information Is