Because Information Is Scarce

question 71

Multiple Choice

Because information is scarce

• A)helps explain why equity contracts are used so much more frequently to raise capital than are debt contracts.
• B)monitoring managers gives rise to costly state verification.
• C)government regulations,such as standard accounting principles,have no impact on problems such as moral hazard.
• D)developing nations do not rely heavily on banks for business financing.

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Definitions:

Parent-child Interactions

The dynamic exchanges between a parent and child, which can significantly influence the child's development and behavior.

Social Norms

Accepted behaviors or rules within a society or group that guide members' actions and interactions, promoting order and cohesion.

Asian Parents

Refers to parenting styles traditionally observed among families of Asian heritage, often characterized by high expectations for academic and success.

Mutual Constitution

The concept that social phenomena and individual actions are co-constitutive, meaning they shape and are shaped by each other reciprocally.