_____ is the lack of incentive to guard against a risk when a person is protected against it, as by being afforded limited liability.

Question

Quizplus · Accepted Answer

Moral hazard refers to the situation where a person has limited liability or is protected against a risk and therefore lacks the incentive to guard against that risk. This can lead to reckless behavior, as the person is not fully exposed to the consequences of their actions. Embezzlement, battery, larceny, and allonge are unrelated to this concept.

_____ Is the Lack of Incentive to Guard Against a Risk