Adverse selection and moral hazard are two different terms that mean essentially the same thing.

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Adverse selection and moral hazard are two distinct and different concepts in the field of economics and insurance. Adverse selection refers to the situation where a person with a higher risk of loss or a more significant negative impact is more likely to purchase insurance. In contrast, moral hazard refers to the phenomenon where insured individuals modify their behavior and take additional risks because they are protected by insurance.

Adverse Selection and Moral Hazard Are Two Different Terms That