Author Question: Asymmetric information in financial markets exists when: a. borrowers reveal their financial ... (Read 82 times)

sarasara · **on:** Jun 30, 2018

Asymmetric information in financial markets exists when:
a. borrowers reveal their financial details to banks before borrowing funds.
b. borrowers know more about their ability to repay loans than lenders do.
c. lenders know more about borrowers than borrowers know about themselves.
d. borrowers pay off a loan before it is due.
e. borrowers and lenders have equal information about borrower creditworthiness.

Question 2

Along the consumption function, an increase in disposable income will:
a. cause autonomous consumption to rise.
b. shift the consumption function upward.
c. cause a corresponding downward shift of the saving function.
d. cause a movement along the given consumption function.
e. shift the consumption function downward.