​Which Is NOT an Example of Moral Hazard

question 21

Multiple Choice

​Which is NOT an example of moral hazard

• A)​people eat less at all-you-can-eat buffets
• B)loggers clear-cut a tract of land when paying a fixed price rather than when paying per tree felled
• C)Drivers of heavier,safer cares are more likely to run stop signs
• D)​workers on commission work harder than those paid an hourly wage

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Definitions:

Potential GDP

Potential GDP is the maximum possible output an economy can produce with full employment of its resources, without causing inflation.

Actual GDP

The total market value of all goods and services produced within a country in a specific period, measuring the economy's real output without adjustment for inflation.

Self-correcting Forces

Economic mechanisms that naturally work to restore equilibrium in markets without government intervention.

Potential GDP

The maximum output an economy can produce without triggering inflation, if it fully employs all available resources, including labor and capital.