The use of collateral
A) allows banks to charge higher interest rates on loans.
B) makes it more costly for borrowers to take advantage of their asymmetric information.
C) makes it more costly for lenders to take advantage of their asymmetric information.
D) has important tax implications for both borrowers and lenders.
B
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The opportunity cost of holding money
a. decreases when the interest rate decreases, so people desire to hold more of it. b. decreases when the interest rate decreases, so people desire to hold less of it. c. increases when the interest rate decreases, so people desire to hold more of it. d. increases when the interest rate decreases, so people desire to hold less of it.
Each of the following increases average labor productivity except :
A. more natural resources. B. more central planning. C. more physical capital. D. more human capital.