Economists disagree with constant government bailouts of large struggling companies because it can give it a rise to :
a. Moral hazard.
b. Adverse selection.
c. Lazy managers.
d. None of the above.
The correct answer is A, moral hazard.
In economics, moral hazard is a situation where a party indulges in risky action knowing it will not bear the consequences of failure. For example, if someone gets generous vehicle insurance (covering every possible damage