Moral Hazard Occurs When Individuals

question 51

Multiple Choice

Moral hazard occurs when individuals:

• A)do not do what is in their own best interest.
• B)know more about acceptable business behavior than other people do.
• C)have an incentive to violate their morals.
• D)know more about their actions than other people do.

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Definitions:

Contracts

Legally binding agreements between two or more parties that specify and regulate the terms of an engagement, service, or transaction.

Positive Discipline

A disciplinary approach focusing on constructive feedback and encouraging employees to learn from their mistakes without fear of punitive actions.

Management

The process of planning, organizing, leading, and controlling resources within an organization to achieve its goals efficiently and effectively.