The Notion That Lenders Must Select from a Pool of Bad

question 13

Multiple Choice

The notion that lenders must select from a pool of bad credit risks,because the most undesirable borrowers are those that most actively seek out a loan is known as the ________.

• A)moral hazard problem
• B)ornamental torsion problem
• C)adverse selection problem
• D)asymmetric innovation problem

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Definitions:

Take Initiatives

The action of identifying opportunities and proactively pursuing them without being prompted by others, showing leadership and self-drive.

Argyris

Refers to Chris Argyris, a pioneer in the field of organizational development, known for his work on the theory of organization behavior.

Highest Productivity

The maximum level of efficiency in which goods and services are produced with the least amount of resources in a given time period.

Principle of Specialization

A core principle that suggests individuals or organizations are more efficient and effective when they focus on a limited set of tasks or a specific area of expertise.