A financial crisis occurs when an increase in asymmetric information from a disruption in the financial system
A) causes severe adverse selection and moral hazard problems that make financial markets incapable of channeling funds efficiently.
B) allows for a more efficient use of funds.
C) increases economic activity.
D) reduces uncertainty in the economy and increases market efficiency.
A
You might also like to view...
If you know the cross elasticity between two goods is negative, then you know the goods are
A) substitutes. B) normal goods. C) complements. D) inferior goods. E) inelastic goods.
Debit cards and e-checks are not money because
A) they can be forged easily. B) they can fail their purpose of being mediums of exchange as a result of technical difficulties. C) they are just instruments to transfer money between people. D) not all banks offer them and not all businesses accept them. E) they are not regulated by the government.