What is the issue of moral hazard in the context of government bailouts during the financial crisis?

• A. Financial institutions may take on excessive risks, believing they will be bailed out by the government.
• B. Banks may refuse to lend money, fearing government intervention.
• C. Homeowners may default on their mortgages, expecting government assistance.
• D. Investors may avoid purchasing government bonds, fearing default.

Answer: (A)