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QUESTION 5 Explain and discuss how information asymmetry can impact economic efficiency. In your answer cover the following: a) What is adverse selection? (6 marks)

QUESTION 5

Explain and discuss how information asymmetry can impact economic efficiency. In your answer cover the following:

a) What is adverse selection? (6 marks) Support your answer with a relevant example. (4 marks)

b) Whyismoralhazardisaneconomicproblem?(6marks)Supportyouranswer with an appropriate example. (4 marks)

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