A Moral Hazard Problem Occurs Before a Transaction-When People Alter

question 113

True/False

A moral hazard problem occurs before a transaction-when people alter their behavior before they
sign a contract, imposing costs on the other party.

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Definitions:

Disruptive

Behaviors or actions that interrupt or disturb the normal operations, peace, or processes of individuals or groups.

Time-Out

A behavioral intervention technique used to remove an individual from a situation for a brief period to decrease unwanted behaviors.

Homeless Shelter

A facility providing temporary housing and sometimes other services to individuals and families without a home.

Trusting Relationship

A bond between individuals characterized by confidence, reliance, and belief in each other's good intentions and capabilities.