Moral hazard refers to the
A)actions you take because they are not fully observable and you are partially insulated from their consequences.
B)risks that result from doing what is morally right.
C)result of moral behavior in a society that is immoral.
D)increased risks that result from acting based on communal rather than personal interests.

Question

Quizplus · Accepted Answer

Moral hazard refers to the possibility that people may take greater risks or act in less responsible ways because they are protected from the full consequences of their actions. This protection can come from insurance, government bailouts, or other forms of risk sharing. Moral hazard can arise when people know that someone else will bear the costs of their actions, either entirely or in part. This can lead to actions that are riskier or less responsible than they would otherwise be.

Moral Hazard Refers to the