Process designed to combat moral hazard problems

Assignment Help Business Economics

Reference no: EM13986842

Which of the following is NOT an example of a process designed to combat moral hazard problems?

A. Banks include restrictive covenants in load agreements that prevent the borrower from using the loan proceeds for purposes other than those agreed to in the loan

B. The rate the employer pays per employee for coverage in the unemployment compensation system increases if the employer experiences above average layoffs.

C. Insurance companies require applicants to provide medical history information as part of the application process

D. Employers regularly monitor employee performance

Reference no: EM13986842

Questions Cloud

Price leadership-the firm that uses a price taker is : Firms have excess capacity in the long run under: The firm that uses a price taker is: In the long run, which type of firm may follow "price leadership"? Under perfect competition, in the long run, firms:

Different in interpretation of coefficient in SLRM and MLRM : What is the different between interpretation of coefficient in SLRM and MLRM? How does it relate to omitted variable bias? How about a linear versus nonlinear multiple regression model coefficients? (quadratic). What is the role of controls?

Example of controlling risk : Which of the following is NOT an example of controlling risk?

Decides to offer employees medical insurance administered : A company with 100 employees decides to offer its employees medical insurance administered by a major health company, but funded totally by the employer—i.e., it self-insurance. The CEO is furious with his HR director who told him that, given their h..

Process designed to combat moral hazard problems : Which of the following is NOT an example of a process designed to combat moral hazard problems?

Government wants to run expansionary fiscal policy : The government wants to run expansionary fiscal policy (deficit spending) to achieve full employment. For this purpose, the government wants to provide each unemployed person with a low wage job. Calculate the amount of additional deficit spending (i..

Both labor productivity and wages double : Suppose it takes a total of 100 hours to produce a car (mathematically speaking, this means one hour of work “produces 0.01 cars”). If the average wage in car making is $50 per hour, and each car needs $1,000 worth of inputs other than labor, What is..

Decision tree for deciding whether to enter a new market : Fig. 17-2 in Froeb & McCann shows a decision tree for deciding whether to enter a new market. Because the expected value of entering ($1) was greater than the expected value of not entering ($0), the decision was to enter. Why might the decision make..

What is wrong with this managers reasoning : The CEO of a trucking company tells his insurance agent that he can predict almost exactly what the total damage to his trucks will be next year due to driver error, but he can’t afford to cover those damages out of operating funds; therefore, he wan..

User Account

All Pages