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    Question about moral hazard and adverse selection

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    If banks face a problem in loan markets when bad credit risks are the ones most likely to seek bank loans, it is described as:

    a) moral hazard
    b) moral suasion
    c) adverse selection
    d) fraud
    e) Profit making trouble

    Which of the above options is correct? Is it moral hazard?

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    https://brainmass.com/economics/banking/question-moral-hazard-adverse-selection-250285

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    The solution contains a multiple choice question about moral hazard and adverse selection.

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