If Borrowers Take on Big Risks After Obtaining a Loan,then

question 123

Multiple Choice

If borrowers take on big risks after obtaining a loan,then lenders face the problem of

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

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Definitions:

Axons

Long, slender projections of nerve cells that transmit electrical impulses away from the neuron's cell body.

Ganglion Cells

Neurons located in the retina that receive visual information from photoreceptors via intermediate bipolar cells and transmit it to the brain.

Optic Nerve

The nerve that transmits visual information from the retina to the brain, allowing for the perception of visual stimuli.

Retina

The sensory membrane that lines the inner surface of the back of the eyeball; contains cells that convert light into neural signals.