Moral hazard:
A)is about unrelated characteristics of people.
B)is about the actions of people.
C)occurs before the parties have entered into an agreement.
D)None of these statements is true.

Question

Quizplus · Accepted Answer

Moral hazard refers to the concept that people may take more risk or act in a more reckless manner when they are not personally liable for the consequences of their actions. It is related to the actions of people, particularly in the context of contracts or insurance agreements. Options A, C, and D are incorrect as they are not true statements about moral hazard.

Moral Hazard