When Deciding What to Use as Money, One Characteristic to Look

question 113

Multiple Choice

When deciding what to use as money, one characteristic to look for is the:

• A) stability of value.
• B) shape.
• C) intrinsic value.
• D) exchange value

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Definitions:

Moral Hazard

The situation where one party is more likely to take risks because another party bears the cost of those risks.

Hidden Actions

Situations in a principal-agent relationship where the agent undertakes actions that the principal cannot observe directly.

Hidden Information

Circumstances in which one party in a transaction has access to more or better information than the other party, potentially leading to an imbalance in decision-making or exploitation.

Moral Hazard

A situation where one party is more likely to take risks because another party bears the cost of those risks.