Answer
Signaling is when one party acts for the only purpose of revealing private information (with credibility). People might obtain college degrees to signal to employers that they are high-ability individuals.
Work Step by Step
Screening is when an uninformed party acts to make an informed party to reveal information. Consumers might ask a used car salesperson to have the car checked by a mechanic. (If the seller refuses, then the consumer knows that the seller is trying to sell a car in horrible condition.)
