What does the term'asymmetric information' mean?
Equal distribution of data
Uneven spread of virus
One party in a transaction knowing more than the other
Uneven supply and demand ratio
Answer
Asymmetric information describes a situation where one party in a transaction possesses more information than the other. This discrepancy can lead to imbalances in power and decision-making, as the informed party may exploit their knowledge advantage. It's a fundamental concept in economics, finance, and other fields, highlighting the significance of information equality and transparency in various transactions and interactions.
Mastering Economics: The Michael Spence Quiz
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