Adverse Selection Is

question 402

Multiple Choice

Adverse selection is

• A)the tendency of a person who is imperfectly monitored to engage in dishonest or otherwise undesirable behavior.
• B)an action taken by an uninformed party to induce an informed party to reveal information.
• C)the failure of majority voting to produce transitive preferences for society.
• D)the tendency for the mix of unobserved attributes to become undesirable from the standpoint of an uninformed party.

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Definitions:

Verbal

Pertaining to or involving words, especially spoken words; often used in contrast to written or non-verbal communication.

Under Seal

A formal method of validating a document by fixing a wax seal, signifying it has legal efficacy or relevance.

Implied

Something suggested or understood without being directly expressed.

Writing

The act or medium of expressing thoughts in visible letters or characters; utilized in law to refer to the embodiment of expressions in a tangible form.