All of the Following Involve a Moral Hazard Problem Except

question 7

Multiple Choice

All of the following involve a moral hazard problem except

• A)an individual driving carelessly after buying a comprehensive insurance policy for a Ford Pinto.
• B)the IMF bailing Mexico out of a financial crisis,with promises to do the same for other nations that might face financial problems.
• C)making regular visits to your doctor because you know that you have full healthcare coverage.
• D)the requirement of banking institutions that owners invest a substantial portion of their own capital in their bank.
• E)membership in FDIC (Federal Deposit Insurance Corporation)by your local bank.

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Definitions:

Reasonable People

Individuals who act with common sense and wisdom, making decisions based on rational thinking.

Systematic Use

The methodical and consistent employment of a procedure, tool, or system for intended outcomes.

Environmental Influences

External factors that impact an individual's behavior, development, and lifestyle, including social, cultural, and physical environments.

Social Pressures

The influence exerted by society or social groups on individuals to conform to expected norms or behaviors.