One Result of Asymmetric Information About People's Ability to Repay

question 336

Multiple Choice

One result of asymmetric information about people's ability to repay a loan is that

• A) loans will only be made to people who don't pay them back.
• B) a bank could make many loans to people who don't pay them back.
• C) lenders are better off than with perfect information.
• D) banks will not make loans.

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Definitions:

Gender Bias

The tendency to favor one gender over another, often leading to unfair treatment or assumptions.

Experimenter Bias

A process where the scientists performing the research influence the results, in order to portray a certain outcome.

Placebo Effect

A phenomenon in which a person experiences a perceived improvement in their condition due to the expectation of treatment, rather than the treatment itself.

Random Selection

A method used in research to randomly choose participants for a study, ensuring that every individual in a population has an equal chance of being chosen, thus increasing the generalizability of the results.