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liq [111]
3 years ago
5

Why do bank panics worsen asymmetric information problems in credit markets?

Business
1 answer:
slava [35]3 years ago
5 0
Bank panics lead to various problems such as fear among the depositors for their safety of money deposited and decline in the assets of the bank.

Bank panic worsen asymmetric information problems in credit markets because  IF A BANK FACES LOSS IT CANNOT RESOLVE AND MANAGE THE ASYMMETRIC INFORMATION PROBLEMS. THIS WORSENS THE ASYMMETRIC INFORMATION PROBLEM IN THE CREDIT MARKETS.
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Explanation:

The bike helmet is needed, but the CD is only wanted. Therefore, it would be smarter to buy the bike helmet and invest in buying the CD later.

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2 years ago
Acme Products manufactures and markets a product called Grow Tall. Acme claims in its advertising that Grow Tall will make its u
adoni [48]

Answer: a. deceptive, and the FTC may issue a cease-and-desist order.

Explanation:

A product that can increase human height by 6 inches sounds highly improbable and so is deceptive to people.

The Federal Trade Commission in it's role as a protector of Consumers from.unfair and deceitful practices in Commerce can act against Acme to stop them from deceiving the consumer.

One of the ways that the FTC can do this is by issuing a Cease and Desist order to Acme and if they fail to do so, can then take them to Court.

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3 years ago
Agency costs involve costs that are incurred from managers pursuing their own interests at the expense of shareholder value, but
Alexxx [7]

Answer:

False

Explanation:

Agency cost is a term used in Administration to describe a special type of expense that arises from conflicts of interest existing in an organization.Within the context of financial management, the main agency conflicts are:

-Between shareholders and managers :Theory of the principal — agent or the problem of the principal — agent  is a theoretical model of economics designed to understand management situations between unequal actors having different degrees of awareness (asymmetric information): the person giving the order (principal) is usually located in the highest hierarchical position and awaits the solution of the task in his interests; on the other hand, the person executing the order (agent: manager or economic agent) is in the lower hierarchical position, but has more information than the principal and can use this information either in the interests of the principal or in his own interests. To solve this problem, various strategies are proposed, such as trusting relationships, general information systems, or focused incentives.

In general, to alleviate agency conflicts, shareholders bear the agency cost, which includes all the relative costs to make the interests of the managers aim to meet their own interests, which is to maximize the share price from the company. However sometimes the shareholders may want management to run the company in a fashion which increases shareholder value.

- Among shareholders and creditors.

5 0
3 years ago
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Answer:

To activate or learn a direct pressure sensor, what does the technician need to do?

Enter learn mode and use a magnet, enter learn mode and decrease inflation pressure, or use a handheld tester.

pls mark brainliest

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2 years ago
Which of the following is correct? a. Nominal GDP is the variable most commonly used to measure short-run economic fluctuations.
Rufina [12.5K]

Answer:

C. Real GDP is the variable most commonly used to measure short-run economic fluctuations. These fluctuations can be predicted with some accuracy.

Explanation:

GDP is the sum of the values of all goods and services produced by an economy in a given period. The difference between nominal GDP and real GDP consists in the fact that nominal GDP is calculated at current prices, while real GDP is calculated at constant prices, ie it is calculated under a base year chosen to eliminate the effect of inflation. A more consistent assessment considers real GDP. The measurement technique consists of deflating GDP by a price index that allows measuring only changes in quantities and not in market prices. Usually, the techniques for measuring GDP have a good forecast.

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