The Tendency for People to Behave in a Riskier Way

question 137

Multiple Choice

The tendency for people to behave in a riskier way or to renege on contracts when they do not face the full consequences of their actions is called:

• A)moral hazard.
• B)adverse selection.
• C)counter information.
• D)collective bargaining.

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Definitions:

Federal Lending Programs

Government-sponsored initiatives designed to provide loans to individuals, businesses, and other entities to promote economic development, support homeownership, or provide relief in financial distress situations.

Commercial Speech

Commercial speech involves any form of communication (e.g., advertising) used by businesses to promote the sale of goods and services, subject to certain regulations to protect consumers.

Constitutional Protection

Safeguards guaranteed by a constitution that protect the rights and freedoms of individuals and entities against infringements by the government.

Informational Function

The role of providing valuable data or knowledge to individuals or entities, facilitating informed decision-making.