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Problem relating to Moral Hazard

When insurance companies pay back insured individuals for all the medical bills they submit: (1) Hypochondria will tend to be cured very rapidly. (2) People would tend to frequent the doctor's office more frequently. (3) An immoral choice problem would foster underutilization. (4) The share of national income devoted to the health care would drop. (5) All of above.

What is the right answer?

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