Author Question: Suppose that a borrower has a near-perfect credit history before the bank loans him some money. ... (Read 101 times)

KWilfred · **on:** Jun 30, 2018

Suppose that a borrower has a near-perfect credit history before the bank loans him some money. Shortly after the loan has been made, he loses his job and spends money recklessly. This describes the problem known as

A) moral hazard.
B) adverse selection.
C) risk aversion.
D) asymmetric information.

Question 2

During 19902003, as a percentage of total resource flows to developing countries, the share of official flows has

(a) remained relatively constant.
(b) increased by a relatively small percentage.
(c) increased by a relatively large percentage.
(d) decreased by a relatively small percentage.
(e) decreased by a relatively large percentage.