A Collateral Constraint Captures the Idea That

question 38

Multiple Choice

A collateral constraint captures the idea that

• A)the budget constraint is irrelevant.
• B)there is asymmetric information in credit markets.
• C)consumers need incentives not to abscond on their debts.
• D)Ricardian equivalence always holds.
• E)assets may be of no use.

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Definitions:

Equitable Estoppel

A legal principle preventing one party from taking unfair advantage of another when their prior actions or words have led to a reliance by the latter.

Consideration

A core concept in contract law that requires a bargain or something of value to be exchanged between parties for a contract to be valid.

Equitable Estoppel

A legal principle preventing someone from arguing something contrary to a claim if a previous action or agreement implied that claim.

Written Promise

A documented commitment by one party to perform or refrain from performing certain actions for another party.