Some young people may decide not to save for old age, gambling that they will supported by the public sector when they retire. This is an example of
A)adverse selection.
B)strategic thinking.
C)moral hazard.
D)consumption smoothing.

Question

Quizplus · Accepted Answer

Moral hazard occurs when individuals take risks because they do not have to bear the full consequences of their actions, in this case, relying on public support instead of saving for retirement.

Some Young People May Decide Not to Save for Old