The concept of adverse selection helps to explain all of the following EXCEPT
A) why firms are more likely to obtain funds from banks and other financial intermediaries, rather than from the securities markets.
B) why indirect finance is more important than direct finance as a source of business finance.
C) why direct finance is more important than indirect finance as a source of business finance.
D) why the financial system is so heavily regulated.
C
You might also like to view...
Refer to the figure above. The region BAH represents the ________
A) consumer surplus after taxation B) tax incidence on consumers C) tax incidence on producers D) deadweight loss due to taxation
In 2014, global revenue for IBM was ________ when measured in local currencies than it was when measured in dollars. This occurred because the value of the U.S. dollar ________ relative to most other currencies
A) lower; increased B) higher; increased C) higher; decreased D) lower; decreased