The tolerance of moral hazard means that:

Question

Quizplus · Accepted Answer

The tolerance of moral hazard refers to the idea that if individuals or institutions are protected from the consequences of their risky behavior, they may be more likely to take even greater risks in the future. In the context of financial markets, this can lead to risk-seeking behavior and the assumption that the government or other institutions will step in to bail them out if things go wrong. Therefore, choice C is the best option as it directly relates to the concept of moral hazard.

The Tolerance of Moral Hazard Means That