This topic contains a solution. Click here to go to the answer

Author Question: Why did the principal-agent problem for investment banks become more severe following the repeal of ... (Read 45 times)

nelaaney

  • Hero Member
  • *****
  • Posts: 560
Why did the principal-agent problem for investment banks become more severe following the repeal of the Glass-Steagall Act in 1999?
 
  What will be an ideal response?

Question 2

In the term real GDP, what does GDP stand for and what does it measure? What does real indicate?
 
  What will be an ideal response?



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Jsherida

  • Sr. Member
  • ****
  • Posts: 314
Answer to Question 1

Congress repealed the Glass-Steagall Act in 1999, after which some commercial banks began engaging in investment banking. Traditionally, large Wall Street investment banks had been organized as partnerships, but by 2000 they had all converted to being publicly traded corporations. In a partnership, the funds of the relatively small group of owners are put directly at risk, and the principal-agent problem is reduced because there is little separation of ownership from control. With a publicly traded corporation, on the other hand, the principal-agent problem can be severe due to the separation of ownership from control.

Answer to Question 2

GDP stands for gross domestic product and measures the value of the total production of final goods and services. Real indicates that the goods and services produced are valued using the prices of the base year, not the current year, and therefore are adjusted for inflation.




nelaaney

  • Member
  • Posts: 560
Reply 2 on: Jun 29, 2018
Great answer, keep it coming :)


yeungji

  • Member
  • Posts: 319
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

 

Did you know?

The toxic levels for lithium carbonate are close to the therapeutic levels. Signs of toxicity include fine hand tremor, polyuria, mild thirst, nausea, general discomfort, diarrhea, vomiting, drowsiness, muscular weakness, lack of coordination, ataxia, giddiness, tinnitus, and blurred vision.

Did you know?

Hyperthyroidism leads to an increased rate of metabolism and affects about 1% of women but only 0.1% of men. For most people, this increased metabolic rate causes the thyroid gland to become enlarged (known as a goiter).

Did you know?

All patients with hyperparathyroidism will develop osteoporosis. The parathyroid glands maintain blood calcium within the normal range. All patients with this disease will continue to lose calcium from their bones every day, and there is no way to prevent the development of osteoporosis as a result.

Did you know?

The U.S. Preventive Services Task Force recommends that all women age 65 years of age or older should be screened with bone densitometry.

Did you know?

Tobacco depletes the body of vitamins A, C, and E, which can result in any of the following: dry hair, dry skin, dry eyes, poor growth, night blindness, abscesses, insomnia, fatigue, reproductive system problems, sinusitis, pneumonia, frequent respiratory problems, skin disorders, weight loss, rickets, osteomalacia, nervousness, muscle spasms, leg cramps, extremity numbness, bone malformations, decayed teeth, difficulty in walking, irritability, restlessness, profuse sweating, increased uric acid (gout), joint damage, damaged red blood cells, destruction of nerves, infertility, miscarriage, and many types of cancer.

For a complete list of videos, visit our video library