Economics (AS & A Level) · May / June 2023 · Paper 32 · Question 7
9708Private costs and benefits, externalities and social costs and benefits
What can be done to help to overcome moral hazard?
- Acharging the same insurance premium to all people in the same age group
- Bdesigning insurance contracts so that the insurance company and client share any loss
- Cgiving unconditional financial support to banks to protect jobs
- Dguaranteeing jobs for bank managers to provide a sense of security
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Correct answer: B. designing insurance contracts so that the insurance company and client share any loss
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