Government inspectors who check on the quality of services provided by retailers as well as government requirements for licensing in various professions are both attempts to resolve:a. The moral hazard problem.b. The asymmetric information problem.

Government inspectors who check on the quality of services provided by retailers as well as government requirements for licensing in various professions are both attempts to resolve:a. The moral hazard problem.b. The asymmetric information problem.

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter12: Money, Banking And The Financial System

Section12.4: The Financial System

Problem 1ST

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Concept explainers

Moral Hazard

The moral is a person's behavior towards himself /herself, society, organization, and others. Hazard is something that is happening and is not good. A person may be morally good or bad. It depends on his attitude, ethics, integrity, and values. A person may have the highest reverence for money to that for the truth. In this case, the person may lie and it is said that the person is morally bad.

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Government inspectors who check on the quality of services provided by retailers as well as government requirements for licensing in various professions are both attempts to resolve:
a. The moral hazard problem.
b. The asymmetric information problem.

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