International Investors Believe That When a Country Gets into Financial

question 35

Multiple Choice

International investors believe that when a country gets into financial trouble, the IMF will rescue the country, thus reducing the investors' risk.As a result, investors take greater risks than they would otherwise.This is an example of

• A)a risk premium.
• B)a lender of last resort.
• C)adverse selection.
• D)moral hazard.

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Definitions:

Symbolic Thought

The ability to use symbols, words, or objects to represent something that is not physically present, foundational for language and imaginative play.

Cognitive Competence

The ability to think, understand, learn, and apply knowledge effectively.

Rudimentary Knowledge

Basic or elementary understanding of a subject or skill, often the foundation for further learning.

Object Permanence

is the understanding that objects continue to exist even when they cannot be observed, a concept typically developed during infancy.