If there are concerns about moral hazard and adverse selection in a country

Question

Quizplus · Accepted Answer

Moral hazard and adverse selection can create inefficiencies in the market and increase the riskiness of investments, which can reduce economic growth.

Answer: C 
 More foreign direct investment may occur because foreign investors may perceive the country as having comparatively fewer moral hazard and adverse selection issues, and be more willing to invest.

If There Are Concerns About Moral Hazard and Adverse Selection