In the Early 2000s, the Government Passed Laws Requiring Banks

question 89

Multiple Choice

In the early 2000s, the government passed laws requiring banks and mortgage brokers to disclose the terms of home loans. Which statement about this action is true?

• A)It was an attempt to solve the information asymmetry problem, but it did not work as intended.
• B)It solved the information asymmetry problem and led to an improvement in the housing market.
• C)The intention of the action was to screen out risky banks and mortgage brokers.
• D)It signaled to consumers that the government cared about the value of their homes.

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Definitions:

Monetary Exchange

The process of trading goods and services using money as a medium of exchange rather than direct barter.

Double Coincidence

A situation in a barter system where two parties each have something the other wants, allowing for an exchange without the need for money.

Limited Specialization

A situation in which individuals or entities focus on a restricted range of products or services to gain greater efficiency, but do not specialize to the extent that they produce only one good or service.

Primitive Societies

Early human communities characterized by simple social structures and technologies.