Which of the following is an example of solving moral hazard by making hidden actions observable?
A)Worker pay is based on productivity.
B)Video surveillance monitors worker actions.
C)Additional hiring screenings ensure that hard-working persons are hired.
D)Laws against theft and fraud reduce those problems in workplaces.

Question

Quizplus · Accepted Answer

Video surveillance is an example of making hidden actions, such as theft or laziness, observable. This reduces the moral hazard problem by providing information about workers' behavior and deterring them from engaging in opportunistic actions. The other options (A, C, and D) do address moral hazard to some extent, but they do not specifically make hidden actions observable.

Which of the Following Is an Example of Solving Moral