Multiple Choice
Which of the following statements is (are) TRUE?
I. Moral hazard can either increase or decrease the likelihood of an insurance claim.
II. Moral hazard is the result of asymmetric information.
III. Insurance coverage sets up moral hazard because people don't respond to the incentives offered by the coverage.
A) I
B) I and II
C) III
D) II
Correct Answer:
Verified
Correct Answer:
Verified
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