Market Inefficiency: It is a situation in which there is lack of information between buyers or sellers. In case of loanable fund market, inefficiency generally means that the market price does not highlight the information regarding demand and supply correctly. The borrower faces constraint to get loans from the bank because bank has certain criteria for providing loans. On the other hand banks lack information about the credibility of the borrower. G Bank: The main function of the bank is to provide loans to the poor people without any legal obligations and collateral security. It also takes responsibility of a borrower if one gets into any difficulty.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 10, Problem 1QFT

To determine

Concept Introduction:

Market Inefficiency: It is a situation in which there is lack of information between buyers or sellers.

In case of loanable fund market, inefficiency generally means that the market price does not highlight the information regarding demand and supply correctly.

The borrower faces constraint to get loans from the bank because bank has certain criteria for providing loans. On the other hand banks lack information about the credibility of the borrower.

G Bank: The main function of the bank is to provide loans to the poor people without any legal obligations and collateral security. It also takes responsibility of a borrower if one gets into any difficulty.

Expert Solution & Answer

Answer to Problem 1QFT

The inefficiency that G bank has exploited is accessibility of loans, loan repayment default, and borrowing constraint. The major source of inefficiency is the borrowing constraint.

Explanation of Solution

Inefficiency Exploited by G Bank

There is much inefficiency that G bank has exploited. Some of them are:

It ensures that the loans taken by the group members are repaid without any legal obligations and credit history of the person.

It also takes financial responsibility of the person who borrows from such banks and gets into some difficult situation.

If all the members repay the loan at the right time then they are offered a large amount of the loan.

It provides loans not on the basis of the current price rather than the amount of the repaid loan by its member.

Source of Inefficiency:

The major source of inefficiency in such markets is the lack of communication between borrowers and lenders.

It is because the needs of borrowers are not fulfilled by the bank due to the borrowing constraints like collateral assets and credit history.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Johnny brought $39.50 to the art supply store. He bought a brush, a sketchbook, and a paint set. The brush was 1 6 as much as the sketchbook, and the sketchbook cost 3 4 the cost of the paint set. Johnny had $2.00 left over after buying these items.

A young woman plans to retire early in 25 years. She believes she can save $10,000 each year starting now. If she plans to begin withdrawing money one year after she makes her last payment into the retirement account (i.e., in the 26th year), what uniform amount could she withdraw each year for 30 years, if the account earns an interest rate of 8% per year? a) Correctly plot the cash flow diagram with its respective vectors, arrowheads, units, and currency values. b) Correct mathematical approach and development, use of compound interest factors.c) Financial logic in the development of the exercise and application of the concept of time value of money. d) Final numerical answer and writing in prose with a minimum of 20 words and a maximum of 50 words of the obtained numerical interpretation.

A hospital charges $200 for a medical procedure, and 1,000 patients use the service. The hospital raises the price to $250, and the number of patients drops to 900. Calculate the price elasticity of demand (PED) and explain your answer. (show all working) Briefly explain how elasticity affects government health policies in the following cases: • Taxes on unhealthy products (cigarettes, alcohol, sugary drinks) • Subsidizing Preventive Care (e.g., vaccines, screenings) Drug Price Controls & Generic Substitutions Co-Payments & Insurance Design

Answer 2

Question

Chapter 10, Problem 1QFT

To determine

Concept Introduction:

Market Inefficiency: It is a situation in which there is lack of information between buyers or sellers.

In case of loanable fund market, inefficiency generally means that the market price does not highlight the information regarding demand and supply correctly.

The borrower faces constraint to get loans from the bank because bank has certain criteria for providing loans. On the other hand banks lack information about the credibility of the borrower.

G Bank: The main function of the bank is to provide loans to the poor people without any legal obligations and collateral security. It also takes responsibility of a borrower if one gets into any difficulty.

Expert Solution & Answer

Answer to Problem 1QFT

The inefficiency that G bank has exploited is accessibility of loans, loan repayment default, and borrowing constraint. The major source of inefficiency is the borrowing constraint.

Explanation of Solution

Inefficiency Exploited by G Bank

There is much inefficiency that G bank has exploited. Some of them are:

It ensures that the loans taken by the group members are repaid without any legal obligations and credit history of the person.

It also takes financial responsibility of the person who borrows from such banks and gets into some difficult situation.

If all the members repay the loan at the right time then they are offered a large amount of the loan.

It provides loans not on the basis of the current price rather than the amount of the repaid loan by its member.

Source of Inefficiency:

The major source of inefficiency in such markets is the lack of communication between borrowers and lenders.

It is because the needs of borrowers are not fulfilled by the bank due to the borrowing constraints like collateral assets and credit history.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 10, Problem 1QFT

To determine

Concept Introduction:

Market Inefficiency: It is a situation in which there is lack of information between buyers or sellers.

In case of loanable fund market, inefficiency generally means that the market price does not highlight the information regarding demand and supply correctly.

The borrower faces constraint to get loans from the bank because bank has certain criteria for providing loans. On the other hand banks lack information about the credibility of the borrower.

G Bank: The main function of the bank is to provide loans to the poor people without any legal obligations and collateral security. It also takes responsibility of a borrower if one gets into any difficulty.

Expert Solution & Answer

Answer to Problem 1QFT

The inefficiency that G bank has exploited is accessibility of loans, loan repayment default, and borrowing constraint. The major source of inefficiency is the borrowing constraint.

Explanation of Solution

Inefficiency Exploited by G Bank

There is much inefficiency that G bank has exploited. Some of them are:

It ensures that the loans taken by the group members are repaid without any legal obligations and credit history of the person.

It also takes financial responsibility of the person who borrows from such banks and gets into some difficult situation.

If all the members repay the loan at the right time then they are offered a large amount of the loan.

It provides loans not on the basis of the current price rather than the amount of the repaid loan by its member.

Source of Inefficiency:

The major source of inefficiency in such markets is the lack of communication between borrowers and lenders.

It is because the needs of borrowers are not fulfilled by the bank due to the borrowing constraints like collateral assets and credit history.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 10, Problem 1QFT

To determine

Concept Introduction:

Market Inefficiency: It is a situation in which there is lack of information between buyers or sellers.

In case of loanable fund market, inefficiency generally means that the market price does not highlight the information regarding demand and supply correctly.

The borrower faces constraint to get loans from the bank because bank has certain criteria for providing loans. On the other hand banks lack information about the credibility of the borrower.

G Bank: The main function of the bank is to provide loans to the poor people without any legal obligations and collateral security. It also takes responsibility of a borrower if one gets into any difficulty.

Expert Solution & Answer

Answer to Problem 1QFT

The inefficiency that G bank has exploited is accessibility of loans, loan repayment default, and borrowing constraint. The major source of inefficiency is the borrowing constraint.

Explanation of Solution

Inefficiency Exploited by G Bank

There is much inefficiency that G bank has exploited. Some of them are:

It ensures that the loans taken by the group members are repaid without any legal obligations and credit history of the person.

It also takes financial responsibility of the person who borrows from such banks and gets into some difficult situation.

If all the members repay the loan at the right time then they are offered a large amount of the loan.

It provides loans not on the basis of the current price rather than the amount of the repaid loan by its member.

Source of Inefficiency:

The major source of inefficiency in such markets is the lack of communication between borrowers and lenders.

It is because the needs of borrowers are not fulfilled by the bank due to the borrowing constraints like collateral assets and credit history.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 10, Problem 1QFT

To determine

Concept Introduction:

Market Inefficiency: It is a situation in which there is lack of information between buyers or sellers.

In case of loanable fund market, inefficiency generally means that the market price does not highlight the information regarding demand and supply correctly.

The borrower faces constraint to get loans from the bank because bank has certain criteria for providing loans. On the other hand banks lack information about the credibility of the borrower.

G Bank: The main function of the bank is to provide loans to the poor people without any legal obligations and collateral security. It also takes responsibility of a borrower if one gets into any difficulty.

Expert Solution & Answer

Answer to Problem 1QFT

The inefficiency that G bank has exploited is accessibility of loans, loan repayment default, and borrowing constraint. The major source of inefficiency is the borrowing constraint.

Explanation of Solution

Inefficiency Exploited by G Bank

There is much inefficiency that G bank has exploited. Some of them are:

It ensures that the loans taken by the group members are repaid without any legal obligations and credit history of the person.

It also takes financial responsibility of the person who borrows from such banks and gets into some difficult situation.

If all the members repay the loan at the right time then they are offered a large amount of the loan.

It provides loans not on the basis of the current price rather than the amount of the repaid loan by its member.

Source of Inefficiency:

The major source of inefficiency in such markets is the lack of communication between borrowers and lenders.

It is because the needs of borrowers are not fulfilled by the bank due to the borrowing constraints like collateral assets and credit history.

Answer 6

Chapter 10, Problem 1QFT

To determine

Concept Introduction:

Market Inefficiency: It is a situation in which there is lack of information between buyers or sellers.

In case of loanable fund market, inefficiency generally means that the market price does not highlight the information regarding demand and supply correctly.

The borrower faces constraint to get loans from the bank because bank has certain criteria for providing loans. On the other hand banks lack information about the credibility of the borrower.

G Bank: The main function of the bank is to provide loans to the poor people without any legal obligations and collateral security. It also takes responsibility of a borrower if one gets into any difficulty.

Expert Solution & Answer

Answer to Problem 1QFT

The inefficiency that G bank has exploited is accessibility of loans, loan repayment default, and borrowing constraint. The major source of inefficiency is the borrowing constraint.

Explanation of Solution

Inefficiency Exploited by G Bank

There is much inefficiency that G bank has exploited. Some of them are:

It ensures that the loans taken by the group members are repaid without any legal obligations and credit history of the person.

It also takes financial responsibility of the person who borrows from such banks and gets into some difficult situation.

If all the members repay the loan at the right time then they are offered a large amount of the loan.

It provides loans not on the basis of the current price rather than the amount of the repaid loan by its member.

Source of Inefficiency:

The major source of inefficiency in such markets is the lack of communication between borrowers and lenders.

It is because the needs of borrowers are not fulfilled by the bank due to the borrowing constraints like collateral assets and credit history.

Answer 7

Chapter 10, Problem 1QFT

To determine

Concept Introduction:

Market Inefficiency: It is a situation in which there is lack of information between buyers or sellers.

In case of loanable fund market, inefficiency generally means that the market price does not highlight the information regarding demand and supply correctly.

The borrower faces constraint to get loans from the bank because bank has certain criteria for providing loans. On the other hand banks lack information about the credibility of the borrower.

G Bank: The main function of the bank is to provide loans to the poor people without any legal obligations and collateral security. It also takes responsibility of a borrower if one gets into any difficulty.

Answer 8

Expert Solution & Answer

Answer to Problem 1QFT

The inefficiency that G bank has exploited is accessibility of loans, loan repayment default, and borrowing constraint. The major source of inefficiency is the borrowing constraint.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Inefficiency Exploited by G Bank

There is much inefficiency that G bank has exploited. Some of them are:

It ensures that the loans taken by the group members are repaid without any legal obligations and credit history of the person.

It also takes financial responsibility of the person who borrows from such banks and gets into some difficult situation.

If all the members repay the loan at the right time then they are offered a large amount of the loan.

It provides loans not on the basis of the current price rather than the amount of the repaid loan by its member.

Source of Inefficiency:

The major source of inefficiency in such markets is the lack of communication between borrowers and lenders.

It is because the needs of borrowers are not fulfilled by the bank due to the borrowing constraints like collateral assets and credit history.

Answer 12

Ch. 10.A - Prob. 1P Ch. 10.A - Prob. 2P Ch. 10.A - Prob. 3P Ch. 10 - Prob. 1QFT Ch. 10 - Prob. 2QFT Ch. 10 - Prob. 3QFT Ch. 10 - Prob. 1P Ch. 10 - Prob. 2P Ch. 10 - Prob. 3P Ch. 10 - Prob. 4P

Answer to Problem 1QFT

Explanation of Solution

Want to see more full solutions like this?

Chapter 10 Solutions