Why is adverse selection more likely in financial markets when interest rates rise?
A) The remaining borrowers are more likely to be risky.
B) Higher interest rates are likely to hurt the economy.
C) If firms have to pay higher interest rates, they may choose to use the funds differently than they first intended.
D) Banks eliminate risky borrowers by raising interest rates.
A
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Which of the following would be most likely to cause a rightward shift of the demand for shares of Planet X, Inc's stock?
a. the appearance of a strong competitor in Planet X's market b. a ban on Planet X's product in a large export market c. the announcement of a profitable new product line from Planet X d. news of a labor strike against Planet X e. the announcement of a new public offering of Planet X stock
Why is globalization becoming more of a worldwide phenomenon?
What will be an ideal response?