In terms of general elections. A candidate will campaign and make promises. Voters have the option to vote for that candidate or another candidate. Why do voters often choose the wrong candidate? Use the principal-agent theory

Daniel Kahneman and the late Amos Tversky are considered to be the founders of modern behavioural economics and finance. In recognition of their work, Kahneman was awarded the Nobel prize in economics in 2002. Reflect on the following points: Are economic agents rational? and What can psychology teach us that will enable us to understand and possibly predict, economic agents’ behaviour? How can “heuristics and biases” have an effect on economic decisions? To what extent is Kahneman’s work relevant to financial decisions?

True/False    A government in economy usually work for the welfare of the people.

Why does a modern capitalist economic system require the existence of markets?