Consider how an economic model can be viewed as a simplified description of reality, designed to yield hypotheses about economic behavior that can be tested. In essence, a simulation. Hence, one important element of an economic model is that it is necessarily subjective in design because there are no objective measures of economic outcomes. If different economists make different judgments about what is needed, how can we tell if a model is ‘useful’? What does this tell us about economic behavior?
Please answer each question with citation and reference at least 200 words 1.How do the concepts of adverse selection and moral hazards affect financial and
Please answer each question with citation and reference at least 200 words 1.How do the concepts of adverse selection and moral hazards affect financial and labor markets? Which of these effects is t