Moral Hazard

question 28

Multiple Choice

Moral hazard

• A)occurs when managers pursue profit maximization without regard to the interests of society in general.
• B)exists when either party to a contract has an incentive to cancel the contract.
• C)occurs only rarely in modern corporations.
• D)is the cause of principal-agent problems.

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Definitions:

Psychoanalytic Therapy

A therapeutic approach developed by Freud that seeks to explore unconscious conflicts and desires that influence current behavior, often through techniques like free association and dream analysis.

Alcoholics Anonymous

A self-help group and fellowship whose members aim to achieve and maintain sobriety through shared experiences, strength, and hope.

Behavior Modification Therapy

A therapeutic approach that seeks to change undesirable behaviors through the use of reinforcement strategies.

Cognitive Psychotherapy

A type of therapy focusing on modifying dysfunctional emotions, behaviors, and thoughts through systematic procedures.