Credit Cards Usually Charge Higher Rates of Interest Than Most

question 84

Essay

Credit cards usually charge higher rates of interest than most other forms of lending. In terms of information, collateral and monitoring, how might these higher rates be explained?

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Definitions:

Market-clearing Wage

The pay rate where the amount of labor offered matches the amount of labor required.

Electronic Devices

Gadgets and equipment that operate by controlling the flow of electrons or other electrically charged particles.

Efficiency Wage Model

A theory suggesting that higher wages lead to increased productivity by attracting higher quality workers and motivating all workers to avoid being fired.

Level of Employment

Refers to the number of people employed in the economy at any given time, influencing overall economic output.