Adverse Selection Exists When

question 137

Multiple Choice

Adverse selection exists when

• A)the parties on one side of the market, who have information not known to others, self select in a way that benefits the parties on the other side of the market.
• B)the parties on one side of a market charge more for something than the parties on the other side of the market want to pay.
• C)one party to a transaction changes his or her behavior in a way that is hidden from and costly to the other party.
• D)the parties on one side of the market, who have information not known to others, self select in a way that adversely affects the parties on the other side of the market.
• E)none of the above

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Definitions:

Unconditional Positive Regard

A practice in psychology that involves showing complete support and acceptance to a person regardless of their actions or feelings.

Genuineness

The quality of being open, honest, and sincere in one's dealings with others.

Emotion-focused Therapy

A therapeutic approach that emphasizes the recognition, acceptance, and processing of emotional experiences to facilitate healing and growth.

Cognitive-behavioural Therapy

A psychotherapy approach that treats problems and boosts happiness by modifying dysfunctional emotions, behaviors, and thoughts.