In Chapter 2,the authors mention the adverse selection problem facing lenders, and they note that lenders can reduce some of the information asymmetries that cause this problem by gathering more information about the loan applicants. There are several types of information that lenders can legally gather (e.g., income, net worth, prior credit history) while some information cannot be legally used for purposes of the credit decision (e.g., race or gender).
For the past several years, Facebookhas provided information about its users to outside companies, including lenders. Further, Facebookpatented a technology that helps lenders make credit decisions based on the applicants' Facebookdata. Facebookhas since reduced some of these practices due to public concern about privacy. Do you think this sort of online profile data should be used for things like lending decisions? If not, would it be okay for lenders to use onlineprofile data if the Facebookusers provided advance permission?4 paragraphs, must have at least an in-text citation and reference in APA formatting, answer the question, focus on your content development, and application of economic terms
In Chapter 3,the authors discuss the transition to a paper-free (cashless and checkless)economy in the US and elsewhere. Although this shift continues,it has not happened as quickly as many people expected 30years ago. Some of the delay is due to old guys like me -- I use electronic banking and payments whenever possible, but I continue to use checks for some business transactions andcash for small personal and business transactions.
I have observed that many younger folks whole-heartedly adopted paper-free transactions. For example, my 22-year-old daughter recently paid a $1.50 restaurant tab with her debit card while I would always use cash for such a small transaction. However, this behavior is not always related to age --my 80-year-old father in-law is nearly paper-free.
You don't have to disclose your age, but please tell us how you use paper or paper-free money in your day-to-day activities. Are you largely paper free? Do you use paper checks or currency for certain transactions? Has your behavior changed over time?4 paragraphs, must have at least an in-text citation and reference in APA formatting, answer the question, focus on your content development, and application of economic terms