Example of not being able to prove the counterfactual

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Reference no: EM13987027

We learn from Gorton that it is not possible to prove that had Lehman Brothers been bailed out by the government or the Federal Reserve the financial crisis of 2008 would not have occurred. This is an example of not being able to prove the “counterfactual”.

True or Fales? Why?

According to Gorton; The limited liability of shareholders in a business creates moral hazard because owners can take risks that can benefit them at the potential expense of creditors.

True or False? Why?

Reference no: EM13987027

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