Obtaining a college degree is an example of:
A) adverse selection.
B) signaling.
C) moral hazard.
D) the principal-agent problem.

Question

Quizplus · Accepted Answer

Obtaining a college degree is an example of signaling, as it signals to potential employers the individual's skills, work ethic, and capability to complete a long-term goal. This helps differentiate the individual from others who may not have completed a degree, showcasing their value to the employer. Adverse selection would only apply if the college or university intentionally accepted individuals with lower qualifications or abilities. Moral hazard and the principal-agent problem both involve issues of risk and responsibility, but do not apply to obtaining a college degree.

Obtaining a College Degree Is an Example Of