Zaneb is a high-school teacher and is well known in her community for her honest

Question

Zaneb is a high-school teacher and is well known in her community for her honesty and integrity. She is shopping for a new car and plans to borrow the money to pay for it from her local bank. Does Zaneb create any moral hazard or adverse selection problems either for the bank or the car dealer? Explain your answer. Do the bank or the car dealer create any moral hazard or adverse selection problems either for Zaneb ? Explain your answer. What arrangements is Zaneb likely to encounter that are designed to help cope with the moral hazard and adverse selection problems she encounters in her car buying and bank loan transactions?

Explanation / Answer

actually she is not creating any moral hazard or adverse selection problem , after all it's just a loan , similarly bank or car dealer are neither doing wrong

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