(Solved):Loan application requires a lot of information from applicants to avoid a. Moral hazard b. Adverse selection c. Free riding d. None of the above Which of the following is true about moral hazard… View Answer…

 

Question

Loan application requires a lot of information from applicants to avoid

a. Moral hazard

b. Adverse selection

c. Free riding

d. None of the above

Which of the following is true about moral hazard

a. Moral hazard arises from actions that cannot be observed.

b. Shrinking is a form of moral hazard

c. Moral hazard refers to the taking of excessive risk

d. All of the above

 

EXPERT ANSWER

1. The answer is Moral hazard. A lot of information, like any health disease in the past or full medical

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