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QUESTION 2 (a) Based on the concept of asymmetric information, illustrate the difference between adverse selection and moral hazard. (8 marks) (b) What is

QUESTION 2 (a) Based on the concept of asymmetric information, illustrate the difference between adverse selection and moral hazard. (8 marks) (b) What is the purpose of having the financial safety nets? Discuss TWO (2) examples of the safety net measures that Malaysia currently adopts. (6 marks) (c) Anticipate TWO (2) drawbacks from the adverse selection on financial safety nets. (6 marks)

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