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Unformatted text preview: The fact that employees lost everything stresses the importance of diversification 12: example of moral hazard- a professional athlete signs a contract; team puts in stipulations; if inured due to breaking these team does not have to pay the athlete anymore 15: important to understand the relationship between asymmetric information, moral hazard and adverse selection 17: investment banking is where the big money is, they are not really a bank 19: know the difference between direct and indirect finance 20: banks (indirect) finance more costly 21: the more likely the borrower had to lose the more likely the bank is to loan them money. 24: loans were made to people who couldnt repay them 26: August 17 2007- when crisis started 27: recession was mild from August 07 until September 08. Most severe rescession since the great depression; called the great recession...
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This note was uploaded on 08/29/2010 for the course ECON 302 taught by Professor Abrams during the Spring '08 term at University of Delaware.
- Spring '08
- Monetary Policy