Adverse selection occurs when
A) a person takes more risks that are not known to the life insurance company because he has life insurance.
B) a person buys life insurance because he has a risky lifestyle that is not known to the life insurance company.
C) a person is a risk lover.
D) pregnant women with health insurance make more doctor visits than uninsured pregnant women.
B
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
Empirical evidence shows that the quantity theory of money is a good theory of inflation
A) in the long run, but not in the short run. B) in the short run, but not in the longrun. C) in both the long run and the short run. D) not in either the long run nor the short run.
A payday loan company has decided to open several new locations in the city. To decide where to open these locations it hires consultants and pays them per store opened. At the end of the quarter, the company notices a many of the new stores' sales volume fail to meet expectations. This is because
a. The consultants are paid per store and not just profitable store locations b. The consultants are paid per store and hence choose the best locations c. The consultants would always choose the best locations d. None of the above
Which of the following could increase the demand for dollars in the foreign exchange market?
a. a higher inflation rate in foreign countries b. higher interest rates in foreign countries c. higher prices in the United States d. a depreciation of the dollar e. an appreciation of other currencies