A colleague tells you that he can get a business loan from

Assignment Help Macroeconomics
Reference no: EM13379878

A colleague tells you that he can get a business loan from the bank, but the rates seem very high for what your colleague considers a low risk loan.

a. Give an adverse selection explanation for this, and offer advice to your friend on how to solve the problem.

b. Give a moral hazard explanation for this, and offer advice to your friend on how to solve the problem.

Reference no: EM13379878

Questions Cloud

Consider the following sample of nine wait times measured : consider the following sample of nine wait times measured in seconds at a drive through coffee shop. the population
Draw lorenz curves for 2 income distributions can you say : draw lorenz curves for 2 income distributions. can you say which distribution isnbsp more unequal based on the
What would happen to each of the following economic : what would happen to each of the following economic varibles if the government increased the money supply by 20 per
Information technology it has been around for a long time : information technology it has been around for a long time but most health care organizations have not embraced
A colleague tells you that he can get a business loan from : a colleague tells you that he can get a business loan from the bank but the rates seem very high for what your
Question 1 veronica has saved 5000 that will be a down : question 1 veronica has saved 5000 that will be a down payment on a new car that can be purchased for 38000.athe loan
1 ten years ago a machine cost 800000 now the same machine : 1 ten years ago a machine cost 800000. now the same machine costs 1200000. calculate the average rate of inflation per
1 a significant difference between monopoly and perfect : 1 a significant difference between monopoly and perfect competition is thata. free entry and exit is possible in a
1 an economist who is studying the relationship between the : 1 an economist who is studying the relationship between the money supply interest rates and the rate of inflation is

Reviews

Write a Review

Macroeconomics Questions & Answers

  Cross-price elasticity information is more important

Where does cross-price elasticity information is more important.

  Explain the relationship among the required reserve ratio

Explain the relationship among the required reserve ratio, the potential deposit expansion multiplier, and deposit expansion multiplier.

  Illustrate the stated direction of recent monetary policy

Illustrate the stated direction of recent monetary policy. What recent actions have the Federal Reserve taken to confirm that direction

  Do you agree with joes argument

Joe enjoys fishing & goes out about 20 times per year. One day, Sara told him that fishing is too expensive of a hobby. She thinks he should stop going because she calculated that it costs about %28.75 for every fish he catches because he usually ..

  Economists are in almost globally agreement that free trade

Economists are in almost globally agreement that Free Trade is good for all countries. Why are they in such universal agreement.

  How are the methods alike and how are they different

ANOVA allows us to determine whether variables are related. Regression analysis allows us to investigate the nature of the relationship between two (or more) variables. How are these methods alike and how are they different

  Explain how will these events impact the equilibrium price

Explain how will these events impact the equilibrium price and quantity of generic soft drinks.

  Macroeconomics multiple choice questions

If twelve units of a good are sold when the price is $1 per unit, and eight units are sold at a value of $1.50 per unit,

  What are major economic justification for state intervention

The term "globalization" is increasingly being used in the study of international relations and international political economy. Increasingly, also, there are debates surrounding the definition of the term and the extent of relevance in the global..

  Explain the factors and mechanisms of growth

Explain the factors and mechanisms of growth, explain how governments use monetary and fiscal policy to manage the economy and use technology and information resources to research issues in principles of economics.

  Find out the income elasticity of demand

Find out  the income elasticity of demand. Elucidate whether gas is a normal or inferior product.

  How many pounds of potatoes will she purchase

f she feels that the fist pound of potatoes is worth $1.50, the second pound is worth $1.14, the third pound is worth $1.05, and all the subsequent pounds are worth $0.30, how many pounds of potatoes will she purchase?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd