This chapter discusses how an understanding of adverse selection and moral hazard can help us better understand financial crises. The greatest financial crisis faced by the Untied States was the Great Depression of 1929-1933. Go to www.amatecon.com/greatdepression.html (Links to an external site.). This site contains a brief discussion of the factors that lead to the Great Depression.
Write a summary explaining how adverse selection and moral hazard have contributed to financial crises.