Which of the Following Is Consistent with a Moral Hazard

question 32

Multiple Choice

Which of the following is consistent with a moral hazard effect stemming from disability insurance?

• A) After the disability insurance program is started,labor force participation declines.
• B) After the disability insurance program is started,labor force participation increases.
• C) Disability applications rise during economic expansions.
• D) A decrease in disability benefits causes the number of disability applications to increase.

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Definitions:

Physiological Response

Describes the body's automatic reactions to a stimulus, including changes in heart rate, hormone levels, and neural activity.

Violent TV

Television programming that includes scenes of physical force intended to hurt, damage, or kill.

Social Cognitive Theory

A theory that emphasizes the role of observational learning, imitation, and modeling in behavior, asserting that people learn within a social context.

Representational Processes

The cognitive mechanisms by which people perceive, interpret, and mentally organize their surroundings.