One Difference Between Moral Hazard and Adverse Selection Is

question 65

Multiple Choice

One difference between moral hazard and adverse selection is

• A)​Moral hazard has to do with unobservable characteristics of individuals
• B)Moral hazard has to do with unobservable actions of individuals
• C)Adverse selection is individuals change their behaviors because of a contract
• D)​Adverse selection is when you choose the wrong answer on a test

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Definitions:

Mental Arithmetic

Mental arithmetic is the ability to perform calculations in one's head without the use of pen, paper, or calculators.

Verification Times

The duration or speed with which individuals confirm the accuracy or validity of information, typically measured in cognitive and psychological experiments.

Finke's Principles

A set of guidelines proposed by Ronald Finke to explain how visual and spatial information is imagined, transformed, and elaborated in the mind.

Visual Imagery

The mental visualization of scenes, objects, or events without their physical presence, engaging the brain's visual processing system.