On the ch 1 unit test (using these as extra study practice) a question is causing me a bit of confusion:
pg 13. q.2
"The owner of a camera store is worried that her new employees may help themselves to items from inventory without paying for them. What kind of hazard is described?"
The manual says the answer is Moral Hazard but is it possible that it could also be a Morale hazard since it entails the employees adopting a certain attitude of indifference to the owner's loss?
Hey Dorothy, thank you for your question. The correct answer is Moral. However, I understand why you might think morale. You should remember that the context of the question involves insurance. The question implies a concern for thievery, which would concern moral character. I could understand that in today's world many folks are frustrated about many things and it does seem to impact their morale, but in this situation we are dealing with a moral hazard. I hope this helps. Thank you.
Yes it helps alot, thank you very much!