A moral hazard arises when
A. high-risk individuals are unable to find insurance.
B. insurance leads the insured to be less careful.
C. risk-averse individuals purchase insurance.
D. insurers are unable to fully pay legitimate claims.
Answer: B
Economics
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Suppose you transfer $1,000 from your checking account to your savings account. How does this action affect the M1 and M2 money supplies?
a. M1 and M2 are both unchanged. b. M1 falls by $1,000 . and M2 rises by $1,000. c. M1 is unchanged, and M2 rises by $1,000. d. M1 falls by $1,000 . and M2 is unchanged.
Economics
When markets fail, public policy can potentially remedy the problem and increase economic efficiency
a. True b. False Indicate whether the statement is true or false
Economics