The following is an example of the moral-hazard problem: Homebuyers do not properly evaluate the risks involved in buying a home, because they are assuming the government will bail them out of a bad mortgage as it has done before.

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This is an example of the moral-hazard problem because it involves individuals taking on more risk under the assumption that they will be protected from the negative consequences of their actions, in this case by government intervention.

The Following Is an Example of the Moral-Hazard Problem: Homebuyers