Q1:

Suppose innovators in the financial industry create software and systems that lower the long run minimum average cost of matching borrowers and lenders. Then

A. borrowers are made better off, but not lenders

B. lenders are made better off, but not borrowers

C. both borrowers and lenders are made better off

D. industry professionals are made better, but borrowers and lenders are made neither worse off or better off

Q2:

Since borrowers have more information about their intention and probability of repaying a loan and some borrowers do not intend to repay their loans

A. borrowers have moral hazard

B. there will be a persistent excess supply of loans

C. the pool of borrowers deteriorates as the interest rate increases

D. always leads to credit rationing

Answer rating: 100% (QA)

Q1 The correct answer is C both borrowers and lenders are made better off Explanation When innovator... View the full answer