Which Is an Example of Moral Hazard

question 242

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.

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Definitions:

Dictation Practice

An educational activity involving the speaking of words or sentences for someone else to write down, aimed at improving writing, typing, or language learning skills.

Attentional Capture

A phenomenon where an individual’s attention is involuntarily drawn towards a particular stimulus, often due to its novelty or salience.

Involuntary Shift

An automatic redirection of attention that occurs without the individual's intentional control, often in response to a novel or significant event.

Viewer

An entity or person observing or consuming content, such as a video, an artwork, or an event.