Most Individuals Save at Banks Rather Than Lend Directly Because

question 12

Multiple Choice

Most individuals save at banks rather than lend directly because:

• A) the bank creates information asymmetry.
• B) moral hazard exists only when individuals make loans directly to borrowers, it does not occur when banks issue loans.
• C) banks can reduce the cost of information asymmetry.
• D) information asymmetry is a problem for individuals but not for banks.

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Definitions:

Human Cochlea

A spiral-shaped, fluid-filled inner ear structure, essential for converting sound wave vibrations into electrical signals for the brain.

Approximately

Used to indicate that a number is not exact, but close to a certain value.

Hyperpolarization

An increase in a cell's membrane potential, making it more negative and less likely to fire an action potential.

Neurotransmitter Release

The process by which neurons release chemical messengers into the synaptic cleft, allowing them to communicate with adjacent cells.