Whenever there is adverse selection, there will be missing market.
Answer the following statement true (T) or false (F)
False
Rationale: If no attempt is made to uncover information, markets will be missing in the sense that either a pooling equilibrium emerges (with markets targeted at individual types missing) or, in a separating equilibrium, a restricted output choice is offered to low cost types in order to keep high cost types from buying in the low cost market. But if there are successful signals and/or screens, no markets might be missing.
You might also like to view...
Symmetric shocks pose fewer problems for nations linked by fixed exchange rates to a base currency. In general:
A) because there are common problems, the economic policy taken by the base currency nation is beneficial for both nations. B) it gives the nation maintaining the peg more autonomy to deal with financial crises. C) the base currency nation can just do nothing, and the issue will resolve itself. D) when there are symmetric shocks, the home nation unlinks its exchange rate from the base currency nation.
Poorly performing financial markets can be the cause of
A) wealth. B) poverty. C) financial stability. D) financial expansion.