Moral hazard is
A) the tendency for people to enter into agreements in which they can use their private information to their own advantage and to the disadvantage of the less informed party.
B) when one of the parties to an agreement has an incentive after the agreement is made to act in a manner that brings additional benefits to himself or herself at the expense of the other party.
C) a situation in which only bad quality items are bought and sold.
D) an action taken outside a market that conveys information that can be used by that market.
B
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Because the Federal Reserve System is a central bank, it provides banking services to
A) no one. B) consumers and business. C) commercial banks. D) the government only. E) businesses only.
Which of the following pairs is the best example of substitutes?
a. Coffee and cream. b. Honey and biscuits. c. Tortillas and salsa. d. Hiking boots and athletic shoes.
If production involves decreasing opportunity cost, the production possibilities curve
a. is "bowed inward." b. is a straight line. c. is "bowed outward." d. is a wavy line. e. has an unpredictable shape.
Which of the following can be used to quantify the overall statistical significance of a regression?
A. t-statistic B. The F-statistic and R-square C. F-statistic D. R-square