All of the Following Are Consequences of Adverse Selection on Good

question 78

Multiple Choice

All of the following are consequences of adverse selection on good firms EXCEPT

• A)the cost of external financing increases.
• B)firms need to rely more on internal funds.
• C)firms need to rely more on accumulated profits.
• D)firms will only be able to attain financing from the government.

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Definitions:

French Art Patron

An individual or institution from France that supports the arts by providing financial assistance, commissioning works, or promoting artists.

17th Century

A period in history from 1601 to 1700, marked by significant cultural, political, and scientific developments in Europe and elsewhere.

Louis XIV

Known as the "Sun King," he was a monarch of the House of Bourbon who reigned as King of France from 1643 until his death in 1715.

Versailles

A grand palace and symbol of the absolute monarchy of Louis XIV, located near Paris, France, known for its lavish architecture and gardens.