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
e) Profit making trouble
Which of the above options is correct? Is it moral hazard?© BrainMass Inc. brainmass.com March 21, 2019, 6:14 pm ad1c9bdddf
The solution contains a multiple choice question about moral hazard and adverse selection.