The Mismanagement of Financial Liberalization in Emerging Market Countries Can

question 1

Multiple Choice

The mismanagement of financial liberalization in emerging market countries can be understood as a severe ________.

• A)asymmetric information problem
• B)lemons problem
• C)principal/agent problem
• D)free-rider problem

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Definitions:

Discount Period

The time span between the present date and the maturity date of a bill of exchange or other negotiable instrument during which it is sold at below its face value.

Credit Period

The time frame between when a purchase is made and when the payment for that purchase is due, without incurring any interest.

Cash Discount

A reduction in the price of an item for sale, offered by the seller as an incentive for the buyer to pay promptly.

Trade Credit

Short-term financing extended by a seller to a buyer allowing the latter to purchase goods or services and pay for them at a later date.