Moral Hazard Occurs When a Person's Behavior Changes in a Way

question 6

Multiple Choice

Moral hazard occurs when a person's behavior changes in a way that

• A)is immoral
• B)is inherently dangerous
• C)increases the chances of an unfavorable outcome
• D)increases the likelihood of profit
• E)raises the net welfare of society

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Definitions:

Detecting Lies

The process of identifying instances of deception through various means, including verbal and non-verbal cues, and technological aids.

Deception

The practice of deceiving someone through the presentation of incorrect data or by hiding the facts.

Polygraph

A device, commonly referred to as a lie detector, that measures and records several physiological indicators such as blood pressure, pulse, respiration, and skin conductivity while the subject is asked and answers a series of questions.

Mood

A temporary state of mind or feeling that can influence perception, behavior, and overall emotional state.