The "Lemons Problem" Exists Because of

question 79

Multiple Choice

The "lemons problem" exists because of

• A)transactions costs.
• B)economies of scale.
• C)rational expectations.
• D)asymmetric information.

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Definitions:

Creditor Nation

A country that has more claims (investments and loans) on other countries than other countries have on it, typically indicated by a positive balance of payments.

Current Account Deficit

A situation where a country's total imports of goods, services, and transfers exceed its total exports.

Swiss Francs

The currency of Switzerland and Liechtenstein, known by the ISO code CHF, and recognized for its stability and reliability.

Demand for Swiss Francs

The desire or need by individuals or institutions to acquire Swiss Francs, often influenced by factors such as investment opportunities and economic stability.