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When the financial system lacks the capability of making judgement about investment opportunities due to asymmetric information leading to potentially bad credit risks lending is subject to ?

A. adverse selection

B. moral hazard

C. social goods

D. hyperinflation

Related Questions on Monetary, Fiscal & Incomes Policy, & Inflation Mcqs

Which of the following is NOT true ?

A. Taxes on international trade are the major source of tax revenue for low-income countries with poor administrative capacity

B. import duties can restrict luxury goods consumption

C. several LDCs have used value-added taxes to raise a substantial fraction of revenues

D. Cascade tax a form of progressive tax, is dominant in DCs