If Bad Credit Risks Are the Ones Who Most Actively

question 93

Multiple Choice

If bad credit risks are the ones who most actively seek loans and,therefore,receive them from financial intermediaries,then financial intermediaries face the problem of

• A)moral hazard.
• B)adverse selection.
• C)free-riding.
• D)costly state verification.

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Definitions:

Birth Control Pills

Medications taken orally by women to prevent pregnancy by suppressing ovulation and altering the uterine lining and cervical mucus.

Physiological Changes

Alterations in the body's normal biological functions, which can occur due to aging, disease, environmental factors, or lifestyle changes.

Vaginal Lubrication

The natural process by which the vagina produces fluid to facilitate sexual intercourse and reduce friction.

Nipple Erection

The involuntary hardening or protrusion of the nipples in response to cold, arousal, or stimulation.