Moral hazard:
A. is about the unobserved characteristics of people.
B. is about the unobserved actions of people.
C. occurs before the parties have entered into an agreement.
D. None of these statements is true.
B. is about the unobserved actions of people.
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In Monetarist theory, the demand to hold money is:
a. The same as the demand to borrow real loanable funds. b. Upward sloping because as the real risk-free interest rate rises, people want to hold more money. c. Rather unstable because it changes greatly with movements in the real risk-free interest rate. d. Neutral, in the sense that it is independent from all macroeconomic variables. e. Rather stable and does not change greatly with movements in the real risk-free interest rate.
A tax is regressive if it
A. is levied on consumers. B. takes a smaller percentage of income as income increases. C. takes a higher percentage of income as income increases. D. takes the same percentage of income regardless of income level.