Which Regulatory Method Does Not Create a Moral Hazard with Respect

question 11

Multiple Choice

Which regulatory method does not create a moral hazard with respect to cost containment?

• A) average-cost pricing
• B) rate-of-return regulation
• C) price-cap regulation

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Definitions:

Education

Education encompasses the process of teaching, learning, and training individuals to develop knowledge, skills, values, and beliefs.

Least Squares Regression

A statistical method used to find the best-fitting line through a set of points by minimizing the sum of the squares of the vertical distances of the points from the line.

Calories

Calories are units of energy used to quantify the amount of energy stored in food and how much energy is utilized by the body.

Sugar

A sweet-tasting, soluble carbohydrate found in many plants, which is commonly used as a sweetener in food.