The Problem of Moral Hazard Has Lead

question 51

Multiple Choice

The problem of moral hazard has lead

• A) the governments of many developing countries to guarantee repayment of all loans.
• B) to higher growth rates in Latin America.
• C) to excessively speculative investment.
• D) to both privilege and responsibility of creditors.
• E) to stable investments with small and steady expected gains.

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Definitions:

Evidence-based Management

The practice of making managerial decisions based on the best available scientific evidence and data.

Simulated Settings

Artificially created environments designed to replicate real-life scenarios for training, testing, or research purposes.

Law of Reciprocity

A social norm suggesting that when someone does something for you, you naturally will want to reciprocate or return the favor in some manner.

Obligation

A duty or commitment to perform or refrain from performing specific actions.