In view of the possible need for government action in markets where asymmetric information is a problem, which of the following is a valid concern?
A)The government rarely has more information than the private parties.
B)Private markets can sometimes deal with information asymmetries on their own.
C)The government is itself an imperfect institution.
D)All of the above are valid concerns.

Question

Quizplus · Accepted Answer

All of the choices are valid concerns. The government rarely has more information than private parties, and private markets can sometimes find ways to deal with information asymmetries on their own. Additionally, the government is not a perfect institution and can make mistakes or be subject to political pressures that affect its ability to address information problems effectively.

In View of the Possible Need for Government Action in Markets