A Sharp Stock Market Decline Increases Moral Hazard Incentives

question 35

Multiple Choice

A sharp stock market decline increases moral hazard incentives

• A)since borrowing firms have less to lose if their investments fail.
• B)because it is immoral to profit from someone's loss.
• C)since lenders are more willing to make loans.
• D)reducing uncertainty in the economy and increasing market efficiency.

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Definitions:

Photoreceptors

Photoreceptors are specialized cells in the retina of the eye that convert light into electrical signals, enabling the perception of images, colors, and light intensity.

Sensory Organs

Parts of the body that contain receptors and structures necessary for processing sensory information, allowing perception of the environment.

Eyes

Organ of vision in humans and other organisms that allows the perception of light, shapes, and colors through a complex process of light detection and signal transmission to the brain.

Compound Eyes

Eyes that consist of thousands of small, individual photoreceptor units, common in insects and crustaceans, providing a wide angle of vision.