The Difference Between Adverse Selection and Moral Hazard Is That

question 71

Multiple Choice

The difference between adverse selection and moral hazard is that

• A)moral hazard happens at the time parties enter into a transaction; adverse selection occurs after the transaction takes place.
• B)adverse selection happens at the time parties enter into a transaction; moral hazard occurs after the transaction takes place.
• C)moral hazard is the motive that is behind one party entering into a transaction with another party.Adverse selection refers to the other party being harmed by the transaction.
• D)moral hazard refers to the likelihood that a transaction will lead one party to be better off at the expense of the other party to the transaction.Adverse selection refers to the consequences of the transaction after it has occurred.

---

Definitions:

Locations

Specific places or positions, often referenced in the context of geographic data, events, or business sites.

DTP App

Desktop Publishing Application, software used for creating high-quality printed material like brochures, magazines, or books.

Professional-Quality Documents

Documents that meet high standards of presentation, organization, and content, suitable for professional contexts.

Publisher

Software used for creating and designing professional documents, such as brochures, newsletters, and posters, or a person or company that prepares and issues books, journals, or music for sale.