________ are asymmetric information problems that act as a barrier to efficient allocationof capital.A) Asset pricesB) Credit imbalancesC) Financial frictionsD) Financial derivatives2. When asset prices rise above their fundamental economic values, a(n) ________ occurs.A) asset-price bubbleB) liability warC) decline in lendingD) decrease in moral hazard3. ________ is a process of bundling together smaller loans (like mortgages) into standarddebt securities.A) SecuritizationB) OriginationC) Debt deflation

________ are asymmetric information problems that act as a barrier to efficient allocationof capital.A) Asset pricesB) Credit imbalancesC) Financial frictionsD) Financial derivatives

When asset prices rise above their fundamental economic values, a(n) ________ occurs.A) asset-price bubbleB) liability warC) decline in lendingD) decrease in moral hazard

________ is a process of bundling together smaller loans (like mortgages) into standarddebt securities.A) SecuritizationB) OriginationC) Debt deflationD) Distribution

A major disruption in financial markets characterized by sharp declines in asset prices andfirm failures is called aA) financial crisis.B) fiscal imbalance.C) free-rider problem.D) "lemons" problem.

Because of the weak systems of property rights in many developing and transitioneconomies, the financial system is unable to use collateral effectively worsening the________ problem.A) adverse selectionB) moral hazardC) principal/agentD) diversification