Governments Can Reduce the Problem of Moral Hazard By

question 71

Multiple Choice

Governments can reduce the problem of moral hazard by:

• A) requiring licenses be obtained before starting a business.
• B) prosecuting fraud and malfeasance.
• C) keeping interest rates low.
• D) reducing corporate income tax rates.

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Definitions:

Void Agreement

A contract or agreement that is legally unenforceable from the outset due to an inherent issue, such as illegality or lack of capacity.

Duress

Illegal pressure exerted upon a person to coerce them into an action against their will or judgment.

Fraud in the Execution

A situation where a person is deceived into signing a contract or document not knowing its true nature or essence, leading to an invalid contract.

Types of Duress

include various forms of coercion or pressure exerted on a person to compel them to act against their will in legal contexts, such as physical, economic, or emotional duress.