Risk pooling:

A. gathers individuals with similar risks and pools them together.
B. reallocates the costs of catastrophes when they occur.
C. reallocates the likelihood of catastrophes happening.
D. diversifies the risk of catastrophes occurring.


Answer: B

Economics

You might also like to view...

The Affordable Care Act will subsidize the purchase of health insurance for which of the following groups?

a. Doctors and nurses regardless of income. b. Individuals and families with incomes between 133 percent and 400 percent of the poverty level. c. Employees who belong to a labor union. d. All workers employed by firms with fewer than 50 full-time employees.

Economics

Assume that foreign capital flows from a nation increase due to political uncertainly and increased risk. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the quantity of real loanable funds per time period and net nonreserve international borrowing/lending balance in the context of the Three-Sector-Model? a. The quantity of real

loanable funds per time period falls and net nonreserve international borrowing/lending balance becomes more negative (or less positive). b. The quantity of real loanable funds per time period rises and net nonreserve international borrowing/lending balance becomes more negative (or less positive). c. The quantity of real loanable funds per time period falls and net nonreserve international borrowing/lending balance becomes more positive (or less negative). d. The quantity of real loanable funds per time period and net nonreserve international borrowing/lending balance remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.

Economics

Since roughly 1970, the U.S. has moved from being a

A. small net creditor nation to a much larger net creditor nation. B. net importer of goods and services to being a net exporter of goods and services. C. net creditor nation to being a net debtor nation. D. net debtor nation to being a net creditor nation.

Economics

What must balance on a balance sheet?

A) Revenues must equal costs. B) Retained earnings plus dividends paid must equal earnings per share. C) Total assets must equal total liabilities plus equity. D) All of these must balance.

Economics