Because of the Moral Hazard Problem

question 24

Multiple Choice

Because of the moral hazard problem,

• A) lenders will write debt contracts that restrict certain activities of borrowers.
• B) lenders will more readily lend to borrowers with high net worth.
• C) debt contracts are used less frequently to raise capital than equity contracts.
• D) all of the above.
• E) only A and B of the above.

Calculate the effects of tariffs and quotas on domestic supply, demand, and government revenue.

Evaluate the consequences of trade policies on consumers, producers, and government.

Understand the goals and impact of the World Trade Organization (WTO) on international trade.

Recognize the achievements and challenges of regional trade agreements such as the European Union (EU) and North American Free Trade Agreement (NAFTA).

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Definitions:

Superposition

A principle stating that in an undisturbed sequence of sedimentary layers, each layer is younger than the one below it and older than the one above it.

Incising

Incising is the process by which a river or stream cuts down into its bed, deepening the channel through the erosion of sediment and rock.

Delta

A landform created by the deposition of sediment carried by a river as the flow leaves its mouth and enters slower-moving or stagnant water.

River Terraces

Flat, bench-like surfaces adjacent to the course of a river, which indicate previous river levels and can be used to reconstruct past environmental changes.