After Many Horrendous First Dates Arranged Through a Dating Website

question 151

Multiple Choice

After many horrendous first dates arranged through a dating website where Cecily provided minimal information,Cecily has decided to ask her good friends,who know all about her,to help her find a companion.By relying on her friends,Cecily is trying to reduce a(n)

• A) moral hazard problem that became a principal agent problem.
• B) principal agent problem that became an adverse selection problem.
• C) principal agent problem.
• D) adverse selection problem.
• E) moral hazard problem.

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Definitions:

Credit Cards

Financial instruments issued by banks allowing cardholders to borrow funds with which to pay for goods and services with the promise to repay the bank within a certain timeframe.

Smoot-Hawley

Refers to the Smoot-Hawley Tariff Act of 1930, which raised U.S. tariffs on over 20,000 imported goods.

Imports

Products or resources that are bought from foreign countries to meet domestic demand or consumption.

U.S. Exports

Goods and services produced in the United States and sold to other countries.