Adverse selection refers to when:
A. one party to a transaction has more information than the other and this results in a bargaining dispute.
B. one party selects the wrong strategy and they are displeased with their selection.
C. one party to a transaction has more information than the other and transactions occur less frequently due to the information asymmetry.
D. neither party is willing to be party to a transaction because they don’t have enough information.
C. one party to a transaction has more information than the other and transactions occur less frequently due to the information asymmetry.
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The IS curve would be vertical if
A) the government's budget was balanced. B) autonomous expenditures were insensitive to the interest rate. C) the demand for money was insensitive to the interest rate. D) the government increased the money supply.
The higher the interest rates
a. the more value individuals place on future dollars b. the more value individuals place on current dollars c. less investments will take place d. does not affect the investment strategy