Moral hazard occurs when individuals:
A)do not do what is in their own best interest.
B)know more about acceptable business behavior than other people do.
C)have an incentive to violate their morals.
D)know more about their actions than other people do.

Question

Quizplus · Accepted Answer

Moral hazard occurs when one party in a transaction has more information about their actions or intentions than the other party, leading to a situation where they may take risks because they do not bear the full consequences of those risks.

Moral Hazard Occurs When Individuals