One way insurance companies deal with the problem of adverse selection is by:
A. screening applicants.
B. charging the same price to everyone.
C. monitoring policyholders after they have purchased insurance.
D. spreading the risk in the same geographic area.
Answer: A
You might also like to view...
Refer to Figure 19-10. Under the Bretton Woods System of exchange rates, if the par exchange rate was $2 per pound in the figure above, and equilibrium persisted at $3, then this was evidence of ________ and the IMF would allow a ________ in the
exchange rate. A) fundamental disequilibrium; revaluation B) fundamental disequilibrium; devaluation C) fundamental overvaluation; revaluation D) fundamental overvaluation; devaluation
Price ceilings set below the equilibrium price cause
A) shortages. B) surpluses. C) a new market equilibrium. D) a greater number of exchanges.
Is the equation of exchange an economic model?
a. Yes, it is a simple but powerful model. b. No, economic models cannot be equations. c. No, it is merely an arithmetic statement. d. Yes, it is a cause-and-effect model.
Tax systems that impose recordkeeping requirements on taxpayers are said to have a(n)
a. auditing burden. b. lower incidence of compliance. c. administrative burden. d. certification requirement.