Which of the following statements best describes the problem of adverse selection?
a. A type of asymmetric information in which one side of an economic relationship can take a relevant action that the other side cannot observe.
b. An approach that borrows insights from psychology to help explain economic choices.
c. The notion that there is a limit to the information that a firm's manager can comprehend and act on.
d. The plight of the winning bidder who overestimates an asset's true value.
a
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The anticipated inflation rate is an important component of the nominal interest rate
a. True b. False Indicate whether the statement is true or false
Which of the following can an economist predict with the most accuracy?
a. how Gwen will respond to an increase in the price of down jackets b. how Larry, Terry, and Mateo will respond to a decrease in the price of orange juice c. how a group of ten will respond to an increase in the price of motorcycles d. how a group of 100 will respond to a decrease in the price of cell phones