When Applying for a Loan, a Borrower Tends to Know

question 45

Multiple Choice

When applying for a loan, a borrower tends to know more about her ability to pay it back than does the bank.This is an example of

• A)perfect information
• B)moral hazard
• C)a low marginal benefit of information for the bank
• D)asymmetric information
• E)optimal search

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Definitions:

Materials Requisition

A document or electronic form used to request the transfer of materials from inventory for production or other internal use.

Time Tickets

Documents used to record the amount of time an employee spends on various tasks, commonly used for job costing.

Individual Job

A specific and unique task or set of tasks undertaken by a company, often used in job-order costing systems.

Time Tickets

Documents used to record the amount of an employee's time spent on each job or task, typically for billing or payroll purposes.