Moral hazard can be avoided by:
A)employers monitoring employee effort.
B)removing the asymmetric information.
C)employers incentivizing employees to maintain consistent effort.
D)All of these statements are true.

Question

Quizplus · Accepted Answer

Moral hazard can be avoided by implementing measures that align the interests of parties involved, such as monitoring, removing information asymmetries, and incentivizing consistent effort. These strategies help ensure that one party does not take undue risks or underperform when another party bears the cost.

Moral Hazard Can Be Avoided By