Because of the Adverse Selection Problem

question 37

Multiple Choice

Because of the adverse selection problem,

• A) good credit risks are more likely to seek loans, causing lenders to make a disproportionate amount of loans to good credit risks.
• B) lenders may refuse loans to individuals with high net worth, because of their greater proclivity to "skip town."
• C) lenders are reluctant to make loans that are not secured by collateral.
• D) all of the above.

Recognize the importance of choosing the appropriate medium and structure for sales messages.

Acknowledge the ethical considerations in framing sales messages.

Determine how to effectively organize persuasive messages for varied audiences.

Understand the significance of reader-oriented viewpoints in sales messaging.

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Definitions:

Social Structure

The organized pattern of social relationships and social institutions that together compose society.

North American Market

Refers to the economic and consumer markets in North America, typically encompassing the United States, Canada, and Mexico.

China

A country in East Asia, the world's most populous nation, with a rich history, diverse cultures, and a rapidly growing economy.

Culture

The shared values, norms, behaviors, and artifacts of a group of people, transmitted from one generation to another.