Author Question: Moral hazard is a barrier to financing global growth because A) of the differences between ... (Read 22 times)

Sufayan.ah · **on:** Jun 30, 2018

Moral hazard is a barrier to financing global growth because

A) of the differences between financing using loans, portfolio investment and foreign direct investment.
B) there is the possibility that the funds are used for riskier behavior than the lender agreed to.
C) firms sometimes have trouble determining whether they need funds or not.
D) if investors have trouble identifying high-risk firms they may be unwilling to give money to creditworthy firms.

Question 2

A decrease in interest rates will

A) shift the investment function relating planned investment to the interest rate to the left.
B) be a movement along the investment function relating planned investment to the interest rate.
C) shift the investment function relating planned investment to the interest rate to the right.
D) have no impact on the investment function relating planned investment to the interest rate.