Multiple Choice
Which is an example of moral hazard?
A) Only people with very high risk of default on loans borrow from banks.
B) Drivers have less incentive to avoid accidents after getting auto insurance.
C) When one bank fails,other banks become more cautious in lending.
D) People living along the Gulf Coast are more likely to buy flood insurance.
Correct Answer:
Verified
Correct Answer:
Verified
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