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QUESTION 2 [10 MARKS] (a) Based on the concept of asymmetric information, illustrate the difference between adverse selection and moral hazard. [4 marks] (6) What
QUESTION 2 [10 MARKS] (a) Based on the concept of asymmetric information, illustrate the difference between adverse selection and moral hazard. [4 marks] (6) What is the purpose of having the financial safety nets? Discuss TWO (2) examples of the safety net measures that Malaysia currently adopts. [3 marks) (c) Anticipate TWO (2) drawbacks from the adverse selection on financial safety nets. [3 marks)
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