Governments Can Reduce the Problem of Moral Hazard By

question 82

Multiple Choice

Governments can reduce the problem of moral hazard by:

• A)requiring licences be obtained before starting a business.
• B)prosecuting fraud and malfeasance.
• C)keeping interest rates low.
• D)reducing corporate income tax rates.

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Definitions:

Labor

Human effort, either physical or mental, used in the production of goods and services.

Core Countries

Nations, usually industrialized, that dominate the global economic system through wealth, diverse production, and strong government institutions.

World Systems Theory

A macro-sociological perspective that analyzes societies in terms of the global economic system, dividing the world into core, periphery, and semi-periphery zones.

Peripheral Countries

Nations that are less developed than the semi-periphery and core countries, often exploited for their resources by more economically dominant nations.