In the two-period model,the nature of the asymmetric information is that
A) only the bank knows who the bad borrowers are.
B) only borrowers know whether they are bad or not.
C) only borrowers know the value of their collateral.
D) only banks can value the collateral.
Correct Answer:
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Q7: If the proportion of bad borrowers increases,
A)
Q8: In the two-period model,the budget constraint is
Q9: In the two-period model with limited commitment,if
Q10: Collateral is used in all of the
Q11: In the two-period model with asymmetric information,a
Q13: The negative impact of the loss of
Q14: Collateralizable wealth is
A) wealth in non-tangible assets.
B)
Q15: An interest rate spread is
A) the difference
Q16: For a consumer bound by the collateral
Q17: When there are credit-market imperfections,an increase in
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