Which of the Following Statements About Asymmetric Information Is True

question 88

Multiple Choice

Which of the following statements about asymmetric information is true?

• A) Asymmetric information occurs when one party to a transaction has relevant information to the transaction that the other party does not have.
• B) Asymmetric information reduces market failures because it makes it easier for individuals to engage in transactions that in the presence of perfect information would take place.
• C) Asymmetric information can only be solved through government intervention.
• D) Asymmetric information occurs only in the market for used cars and in the insurance market.

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Definitions:

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