The Problem Created by Asymmetric Information Before the Transaction Occurs

question 118

Multiple Choice

The problem created by asymmetric information before the transaction occurs is called ________,while the problem created after the transaction occurs is called ________.

• A)adverse selection;moral hazard
• B)moral hazard;adverse selection
• C)costly state verification;free-riding
• D)free-riding;costly state verification

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Definitions:

Plagiarism

The act of copying someone else's work, ideas, or expressions without proper acknowledgment or permission.

Quoting

The act of repeating or copying words from another source, typically with acknowledgment to attribute the original speaker or author.

Paraphrasing

Rewording or rearticulating something written or spoken by someone else.

Summarizing

The act of expressing the main points or essence of a larger document or speech concisely.