Question: Question Completion Status: Moving to another question will save this response. Question 16 of 21 Question 16 4 points SweAnswer In the moral hazard model

 Question Completion Status: Moving to another question will save this response.

Question Completion Status: Moving to another question will save this response. Question 16 of 21 Question 16 4 points SweAnswer In the moral hazard model seen in Lecture 1, consider the effects of an increase both in the private benefit from shirking (B) and in the amount of cash initially available to the entrepreneur (A) Both effects increase the chances that the project will be funded Both effects increase the chances that the project will not be funded An increase in A will make the entrepreneur demand a larger stake in the project, thus reducing pledgeable income. An increase in Bhas similar effects. An increase in B reduces pledgeable income, while an increase in A allows the entrepreneur to offer a higher return to investors while credibly committing not to shirt Moving to another question will save this response. Question 16 of 21 MacBook Air

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