Requiring a Large Net Worth on the Part of an Applicant

question 79

Multiple Choice

Requiring a large net worth on the part of an applicant is one way lenders treat the problem of:

• A)Free-riders
• B)Adverse selection
• C)Moral hazard
• D)The Lemons market

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Definitions:

Hyposecretion

Abnormally reduced output of a secreted material. Compare with hypersecretion.

Growth Hormone

A hormone produced by the pituitary gland that stimulates growth, cell reproduction, and cell regeneration in humans and other animals.

Thyroxine

A substance created by the thyroid gland responsible for controlling metabolism, the production of energy, and the processes of growth and development.

Prolactin

Hormone secreted by the pituitary gland that stimulates cells of the mammary glands to produce milk in a nursing mother. Helps maintain water and electrolyte balance in fishes and amphibians. Inhibits metamorphosis in amphibians and stimulates molting in reptiles. Has a role in immune function and in the formation of new blood vessels.