If Bad Credit Risks Are the Ones Who Most Actively

question 93

Multiple Choice

If bad credit risks are the ones who most actively seek loans and,therefore,receive them from financial intermediaries,then financial intermediaries face the problem of

• A)moral hazard.
• B)adverse selection.
• C)free-riding.
• D)costly state verification.

Determine the impact of intra-company sales on the overall profitability of the company.

Assess the financial benefits of internal transfers for both the selling and buying divisions.

Identify variables that influence transfer pricing decisions, such as variable costs, idle capacity, and external supply costs.

Evaluate the impact of reduced shipping and selling costs on transfer pricing.

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Definitions:

Surplus

An excess of what is needed, often referring to goods, funds, or resources beyond what is used.

Tariff

A levy placed by the government on goods being imported or exported.

Consumer Surplus

The distinction between the theoretical spending capacity of consumers on a good or service and their actual spending.

Trade

The exchange of goods, services, or both between two or more parties, either domestically or internationally.