To the extent that there are concerns about moral hazard and adverse selection in a country,

Question

Quizplus · Accepted Answer

Concerns about moral hazard and adverse selection can lead to a lack of trust in the financial and economic system, which can hinder economic growth and development. This can lead to a reluctance to invest in new projects or businesses, as there may be doubts about the ability of borrowers to repay loans or the quality of the investments. As a result, financing for new development projects may be harder to arrange. Therefore, option A is the best choice. The other options are not directly related to concerns about moral hazard and adverse selection.

To the Extent That There Are Concerns About Moral Hazard