Identify each of the following as either an adverse selection problem or a moral hazard problem: a.
Question:
Identify each of the following as either an adverse selection problem or a moral hazard problem:
a. Poor drivers apply for car insurance more than good drivers do.
b. The federal government promises to help banks that get into financial problems.
c. The federal government insures checkable deposits
(promises to repay the holder of the checkable deposit if the bank fails).
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