A Situation Where a Contract Distorts Incentives to Behave Responsibly

question 39

Multiple Choice

A situation where a contract distorts incentives to behave responsibly is known as:

• A)information asymmetry
• B)coincidence of wants
• C)pooling of funds
• D)moral hazard.
• E)None of these.

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Definitions:

Tenth Amendment

The Tenth Amendment to the United States Constitution, part of the Bill of Rights, expresses the principle that the federal government possesses only those powers delegated to it by the states or the people.

Freedom Summer

A 1964 voter registration drive aimed at increasing the number of registered black voters in Mississippi, highlighted by grassroots community organizing and widespread civil rights activism.

Mississippi Freedom Democratic Party

A political party formed in 1964 as an alternative to the then all-white Mississippi Democratic Party, with the goal of challenging racial discrimination in politics.

Political Power

The ability or capacity of an individual or group to influence or control the actions, policies, or decisions of others, particularly in the context of governance.