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Moral hazard refers to situations in which: a) A principal-agent relationship exists such that one party hires another party to perform some task on the
"Moral hazard" refers to situations in which:
a) A principal-agent relationship exists such that one party hires another party to perform some task on the former party's behalf
b) The agent takes an action that affects the principal
c) The principal and the agent agree on which action is the best one for the agent to take
d) One party cannot observe the characteristics of the other party
e) One party takes actions that the other side cannot observe
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