Which of the Following Statements Is False

question 30

Multiple Choice

Which of the following statements is false ?

• A)Asymmetric information can exist both before and after a transaction takes place.
• B)Moral hazard occurs when one party to a transaction changes his or her behavior in a way that is hidden from and costly to the other party.
• C)Adverse selection has the potential to eliminate some markets.
• D)Asymmetric information only exists after a transaction takes place.

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Definitions:

Incubation

A period of subconscious processing that leads to creative solutions or ideas after a break from conscious thought.

Verification

The process of establishing the truth, accuracy, or validity of something through examination and evidence.

Creativity

The ability to generate or recognize ideas, alternatives, or possibilities that may be useful in solving problems, communicating with others, and entertaining ourselves and others.

Divergent Thinking

A thought process or method used to generate creative ideas by exploring many possible solutions, fostering innovation and problem-solving.