What Would Be the Consequence of a Law That Forced

question 15

Multiple Choice

What would be the consequence of a law that forced individuals to receive an annual preventive health checkup?

• A) The adverse selection problem would become more intense.
• B) The moral hazard problem would become more intense.
• C) The adverse selection problem would become less intense.
• D) The moral hazard problem would become less intense.
• E) Both the moral hazard and adverse selection problems would become less intense.

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Definitions:

Effective Federal Tax Rate

The average rate at which an individual or a corporation is taxed by the federal government, calculated by dividing the total tax paid by taxable income.

Tax-Deferred Retirement

Investment accounts, like 401(k)s or IRAs, that allow earnings to grow tax-free until funds are withdrawn, usually during retirement.

Flexible Spending Account

A type of savings account, usually for healthcare or dependent care expenses, that offers tax advantages by using pre-tax dollars.

Federal Taxes

Federal Taxes are imposed by the government on income, goods, services, and activities, used to fund public services and government operations.