Which Is an Example of Moral Hazard

question 242

Multiple Choice

Which is an example of moral hazard?

• A) Only people with very high risk of default on loans borrow from banks.
• B) Drivers have less incentive to avoid accidents after getting auto insurance.
• C) When one bank fails,other banks become more cautious in lending.
• D) People living along the Gulf Coast are more likely to buy flood insurance.

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Definitions:

Verbal Abuse

The use of words to cause harm to the person being spoken to, involving insult or coercion.

Aggression

Behavior aimed at causing harm or injury to others, which can be physical or verbal, and motivated by various factors.

Sociocultural Factors

Aspects of society and culture that impact an individual's thoughts, behavior, and emotions, such as norms, values, and beliefs.

Serious Physical Assault

A form of violence characterized by a severe attack or harm done to another person's body.