One difference between moral hazard and adverse selection is

a. ?Adverse selection is when you choose the wrong answer on a test
b. ?Moral hazard has to do with unobservable characteristics of individuals
c. ?Adverse selection is individuals change their behaviors because of a contract
d. ?Moral hazard has to do with unobservable actions of individuals


Ans: d. ?Moral hazard has to do with unobservable actions of individuals

Economics

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