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.

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Definitions:

Genetically

Pertaining to genes or heredity, often referring to the origin of traits and characteristics.

Temporal Cortex

The temporal cortex is part of the cerebral cortex that is involved in processing auditory information and is critical in the understanding of language, the formation of long-term memory, and emotion.

Neurons Activation

The process by which neurons become active, typically involving the influx of ions to generate an electrical impulse.