https://www.topgradeaccountants.com/wp-content/uploads/2020/07/LOGO-TG1.png 0 0 milton https://www.topgradeaccountants.com/wp-content/uploads/2020/07/LOGO-TG1.png milton2020-09-18 10:33:252020-09-18 10:33:25Explain how the agency problems have played a role in different parts of the economy: moralhazard (u
Explain how the agency problems have played a role in different parts of the economy: moralhazard (unobserved effort), and adverse selection (unobserved type). Define clearly who arethe economic agents involved (managers, stockholders, borrowers, government, etc.). Foradditional points, use a simple model to illustrate the situations: remember that the mostimportant conditions are the incentive compatibility constraint and the participation con-straint. Be concise and clear in your explanation and focus on what the theory says. Avoidmaking unfounded statements.