assignment 3 - Econ 350-01 Spring 2008 ASSIGNMENT THREE...

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Econ 350-01 Kenny Christianson Spring 2008 due: April 4 ASSIGNMENT THREE 1. Describe whether each of the following is an example of adverse selection or moral hazard, and why. a. When I drive a rental car, I drive much more recklessly than when I drive my own car. b. The sickest people are the ones most likely to sign up for health insurance. c. Weasel Wannabe took out a business loan from Firstbank to start a hot dog stand, but instead spent the money on a trip to Aruba. d. Neighborhoods with high levels of student housing and low levels of owner-occupied housing tend to deteriorate more quickly than other neighborhoods. e. The safest borrowers are unlikely to need bank loans. 2. To find the current balance sheet for all commercial banks in the United States, go to the following web site: www.federalreserve.gov/releases/h8/current . Navigation instructions are included in Class 9 notes if the link is not working.
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This note was uploaded on 09/08/2008 for the course ECON 350 taught by Professor Christianson during the Spring '08 term at Binghamton University.

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assignment 3 - Econ 350-01 Spring 2008 ASSIGNMENT THREE...

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