Which of the following are examples of moral hazard? (Check all that apply.)
A company dumps pollution into a local lake that will be cleaned using taxpayer money.
A CEO with a multi-million-dollar severance agreement performs poorly knowing he will be well compensated even if he is laid off.
A processed food manufacturer distributes frozen vegetables tainted with e. coli.
Banks make very risky loans with the knowledge that the government will bail them out if necessary.A company dumps pollution into a local lake that will be cleaned using taxpayer money.
A CEO with a multi-million-dollar severance agreement performs poorly knowing he will be well compensated even if he is laid off.
Banks make very risky loans with the knowledge that the government will bail them out if necessary.