If insurance did not exist in the United States,which of the following might reasonably be expected to happen?
A)Banks would lower their interest rates on car loans
B)Moral hazards would increase
C)Morale hazards would decrease
D)In general, only small businesses would be able to survive

Question

Quizplus · Accepted Answer

Without insurance, individuals would bear the full financial risk of their actions, which could lead to an increase in moral hazards. Moral hazards refer to the tendency for individuals to engage in risky behavior because they are protected from the full consequences of their actions. For example, without car insurance, individuals may be more likely to drive recklessly or without proper maintenance because they will not have to pay for damages or injuries out of their own pocket.

If Insurance Did Not Exist in the United States,which of the Following