Multiple Choice
How do hidden actions and hidden characteristics relate to the moral hazard and adverse selection problems
A) Hidden actions and hidden characteristics are both associated with the moral hazard problem.
B) Hidden actions and hidden characteristics are both associated with the adverse-selection problem.
C) Hidden actions are associated with the moral hazard problem, whereas hidden characteristics are associated with the adverse-selection problem.
D) Hidden actions are associated with the adverse-selection problem, whereas hidden characteristics are associated with the moral hazard problem.
Correct Answer:
Verified
Correct Answer:
Verified
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