Asymmetric information in the loan market is a potential problem usually resulting from __________. Multiple Choice lenders having more information than borrowers and not disclosing this information the fact that people are basically dishonest the uncertainty about Federal Reserve monetary policy borrowers having more information than the lenders, and not disclosing this information

Asymmetric information in the loan market is a potential problem usually resulting from __________. Multiple Choice lenders having more information than borrowers and not disclosing this information the fact that people are basically dishonest the uncertainty about Federal Reserve monetary policy borrowers having more information than the lenders, and not disclosing this information

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter14: Money And The Federal Reserve System

Section: Chapter Questions

Problem 15SQ

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In Pakistan there is currently a pensions crisis because the government did not plan pensions of public sector employees efficiently. Instead of raising funds from lifetime earnings of employees, and giving pensionsas returns on savings, pensions currently require budgetary allocation in Pakistan, leading to financial burden on government. In developed countries like the US, where people plan their own pensions this planning for retirement requires a lot of effort, forward thinking and knowledge of financial opportunities. Even then pensions are never completely secure in the US.So, this system is not entirely suitable in Pakistan. Examine the Pension Crisis from perspective of Permanent Income Hypothesis and its modern versions to explain the possible causes of this crisis. Related to causes in part I suggest solutions to the pension crisis in Pakistan
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question 5 During financial/banking crises, central banks typically act as lenders of last resort to stabilize the financial system. Why is this role considered to be critical? options a. If there is a lender of last resort, this can induce another moral hazard problem between financial intermediaries and the central bank with high cost for the society. b. Large banks can be "too big to be rescued" c. Central banks are supposed to focus on inflation and the role of lender of last resort induces a conflict of interests. d. All of the above
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Subprime mortgages are O mortgages issued to borrowers with flawed credit histories. government-backed mortgages issued by Fannie Mae and Freddie Mac. mortgages issued to borrowers who fail to document that their incomes are high enough to afford their mortgages. mortgages which are bundled together by financial institutions and sold to investors.
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