Moral hazard means that as the number of employees a firm needs increases, it becomes increasingly difficult for it to find the right employees, place them in appropriate positions, and provide adequate supervision.

Question

Quizplus · Accepted Answer

Moral hazard refers to a situation where one party takes more risks because they know that another party will bear the costs of those risks. It is not related to the difficulty of finding and supervising employees as a company grows.

Moral Hazard Means That as the Number of Employees a Firm