Moral hazard occurs only when people fail to do what is in their best interest.True

Question

Quizplus · Accepted Answer

Moral hazard is a situation where someone is more willing to take risks because they know that the potential costs or negative consequences will be borne by others. It occurs due to imperfect information, incomplete contracts, and other factors beyond the control of individuals. Therefore, moral hazard can occur even when people do what is in their best interest, but they do not bear the full cost or consequences of their actions.

Moral Hazard Occurs Only When People Fail to Do What