Jack McGillivray, Chapter 5, Question 6

This chapter taught me that programs which sound viable can be economic disasters. One example of this is the hope scholarships. In theory they sound great, everyone gets a loan that they will be able to afford. When I read this section in the book I personally couldn't think of any reason why they wouldn't work. But i hadn't considered the fact that the borrower wild have such an imbalance of information and would be able to pick the loan program that would cost them the least. Until reading this I never realized how much of a role information plays in transactions. It is amazing to me how such a small imbalance of information can drastically impact markets like insurance and used car sales. This chapter also helped me to understand the reasons why the Affordable Care Act was passed and what it actually does.