Which of the Following Is a Problem of Moral Hazard

question 85

Multiple Choice

Which of the following is a problem of moral hazard?

• A) A lender cannot distinguish good risk from bad risk borrowers.
• B) An individual who purchases auto insurance begins to leave his or her keys in the car while running into a store.
• C) Life insurance companies offer an average premium to smokers and non-smokers so they do not have to have two different premiums.
• D) An auto insurance company charges higher premiums to younger drivers than what they charge to older drivers.

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Definitions:

Black Education

The historical movement and ongoing efforts to ensure educational access, quality, and equity for African American or Black populations, particularly in the context of segregation and discrimination.

Northern Societies

Refers to communities or groups located in the northern part of a country or continent, often characterized by specific cultural, economic, and social traits distinct from those in southern regions.

Cotton Prices

The cost or monetary value of cotton on the global or local market, influenced by factors like supply, demand, and global economic conditions.

Economic Policies

Strategies and actions that governments or economic organizations employ to influence the economy of a city, region, or country.