Because Information Is Scarce

question 71

Multiple Choice

Because information is scarce

• A)helps explain why equity contracts are used so much more frequently to raise capital than are debt contracts.
• B)monitoring managers gives rise to costly state verification.
• C)government regulations,such as standard accounting principles,have no impact on problems such as moral hazard.
• D)developing nations do not rely heavily on banks for business financing.

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Definitions:

Americans

Citizens of the United States or people living within its boundaries; also can refer to the broader identities and cultures within the United States.

Third-party Candidate

A candidate in an electoral system who represents a political party outside the two dominant parties in a two-party system.

New York City

The most populous city in the United States, located in the state of New York and known for its significant cultural, financial, and media impact globally.

Mayor

The elected head of a city, town, or other municipality, responsible for governing and managing municipal affairs and policies.