Moral Hazard Is an Incentive for a Party to a Transaction

question 39

True/False

Moral hazard is an incentive for a party to a transaction to engage in risky or undesirable behavior because the transaction protects that same party against loss.

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Definitions:

Sugar

A sweet-tasting, soluble carbohydrate used commonly as a sweetener in food and drinks.

Tariff

Tax on an imported good.

International Trade

The exchange of goods, services, and capital across international borders or territories, influencing global economic activity.

Sugar

A sweet-tasting crystalline substance obtained from various plants, primarily sugar cane and sugar beet, used as a sweetener in food and drink.