An example of moral hazard is
A)workers working diligently even though the boss is not looking
B)health care insured forgoing their diet and exercise
C)drivers of safer cars turning their phones off before driving
D)borrowers investing their loan proceeds exactly as the bank requires

Question

Quizplus · Accepted Answer

Moral hazard refers to the risk that individuals or organizations may behave recklessly or irresponsibly because they do not bear the full consequences of their actions. In this case, health care insured may be more likely to engage in risky behaviors or neglect their health because they believe that their insurance will cover any resulting medical expenses, thus they forgo diet and exercise.

An Example of Moral Hazard Is