You lower the deductible on your car insurance and start driving like Michael Schumacher (a retired Formula One race car driver).This is an example of:

Question

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This scenario is an example of moral hazard because the individual is taking more risks and driving more recklessly because they know they have a lower deductible and will not have to pay as much if they get into an accident.

You Lower the Deductible on Your Car Insurance and Start