Moral Hazard Occurs When a Person's Behavior Changes in a Way

question 6

Multiple Choice

Moral hazard occurs when a person's behavior changes in a way that

• A)is immoral
• B)is inherently dangerous
• C)increases the chances of an unfavorable outcome
• D)increases the likelihood of profit
• E)raises the net welfare of society

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Definitions:

Exaggerated

Describes something that has been presented in a way that makes it seem more important, serious, or large than it actually is.

Temperament

Refers to the inherent personality traits and dispositions that influence how individuals respond to their environment emotionally, behaviorally, and cognitively from an early age.

Emotions

Complex psychological states that involve a physiological response and an expressive reaction to external or internal events.

Personality

The combination of emotions, thoughts, behaviors, and patterns that define an individual's character and influences their interactions with the environment.