One Reaction of Firms to the Adverse Selection Problem Is

question 65

Multiple Choice

One reaction of firms to the adverse selection problem is to

• A)rely on internal funds to finance investment.
• B)use the stock market rather than the bond market to raise funds.
• C)use the bond market rather than the stock market to raise funds.
• D)borrow long-term rather than short-term.

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Definitions:

Intersectionality

A framework for understanding how aspects of a person's social and political identities combine to create different modes of discrimination and privilege.

Fluidity

The quality or state of being able to change or move easily; in social contexts, it often refers to the flexibility of identity, roles, or preferences.

Equality

The condition of having the same status, rights, and chances.

Equity

The principle of fairness and justice in the allocation of resources or treatment of individuals, often considering historical and social inequalities.