Describe the problem of asymmetric information that an employer faces in hiring a new employee. What solutions can you think of? Does the problem persist after the person has been hired? If so, how and what can be done about it? Is the problem more or less severe for employees on a fixed salary? Why or why not?
Answer to relevant QuestionsIn some cities, newspapers publish a weekly list of restaurants that have been cited for health code violations by local health inspectors. What information problem is this feature designed to solve, and how?You are in charge of setting policies for implementing construction loans at a bank once the loan officer has approved the borrowers’ applications. (Construction loans finance the development of a structure during the ...Under what circumstances, if any, would you be willing to participate as a lender in a peer-to-peer lending arrangement?The rise of securities markets and the expansion of intermediation by nonbanks has come partly at the expense of commercial banks. Plot the ratio of bank credit (FRED code: TOTLL) to total credit market debt outstanding ...Consider the balance sheets of Bank A and Bank B. If reserve requirements were 10 percent of transaction deposits and both banks had equal access to the interbank market and funds from the Federal Reserve, which bank do you ...
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