Describe the characteristics of optimal contracts

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Q. 1. Describe the Arrow-Pratt measures of risk-aversion, both absolute (r) and relative.

2. Describe the characteristics of optimal contracts in principal-agent problems when the agent (manager) is risk neutral.

Q. In a well-developed five to eight sentence paragraph, discuss the difference between GDP and GNP. Your essay should include a definition of both, specific examples of what could affect each, and a discussion of why it is more accurate to examine both when trying to determine a country's economic success.

 

Reference no: EM1354796

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