ECON 1020 Lecture Notes - Lecture 13: Systemic Risk, Moral Hazard, Structural Unemployment
9 Nov 2016
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Questions on video, what is systemic risk and moral hazard? i. systemic risk: if one bank fails it will negatively effect others ii. Is a risk in the system that could causes terrible repercussions iii. Moral hazard: create a disincentive: how did the film demonstrate the interconnectedness of the. Marcoeconomy: based on the rilm, what events led to the i. Sub prime mortgage: given to those that have bad credit scores for very low interest over a long time, small down payment. iii. People were gamboling weather or not people could homeowners could afford their loans. iv. Personal consumption expenditures (c): household spending on consumer goods ii. Gross private domestic investment (i): spending by firms and households on new capital, that is, plant, equipment, inventory, and new residential structures iii. Hold price constant (use base yr) to see hour q is changing: unemployment, population = labor force + not in labor force i.
