Due to moral hazard,the goal of providing security is likely to conflict with the goal of efficiency.

Question

Quizplus · Accepted Answer

Moral hazard is the risk that arises when individuals or entities behave differently because they are insulated from the consequences of their actions. In the context of providing security, moral hazard can lead to individuals or entities becoming careless or taking risks because they feel protected from harm. This can conflict with the goal of efficiency, which is to maximize output or minimize costs, as providing too much security can be costly and inefficient. Therefore, there is likely to be a trade-off between providing security and achieving efficiency.

Due to Moral Hazard,the Goal of Providing Security Is Likely