Moral hazard occurs when an agreement encourages undesirable behavior.

Name: Moral hazard occurs when an agreement encourages undesirable behavior.
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Question

Quizplus · Accepted Answer

Moral hazard arises when one party in a transaction takes on more risk because they do not bear the full consequences of that risk, often due to protections or incentives provided by the agreement.

Moral Hazard Occurs When an Agreement Encourages Undesirable Behavior