Moral Hazard Is the Risk That the Existence of a Contract

question 27

True/False

Moral hazard is the risk that the existence of a contract will change the behaviors of parties to the contract.

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Definitions:

Voluntary Enforcement

The practice of adhering to rules or agreements based on personal or organizational choice rather than legal obligation.

Labor Standards

Regulations and policies establishing minimum requirements for working conditions, including wages, working hours, safety, and health protections.

Environmental Standards

Guidelines and criteria set to regulate activities and prevent harm to the environment, often involving emissions, waste management, and resource consumption.

Corporate Citizenship

Involves a company's responsibilities towards society and the environment, striving to contribute positively through sustainable practices, philanthropy, and ethical behavior.