Related to the Economics in Practice on Page 356: Insurance

question 115

Multiple Choice

Related to the Economics in Practice on page 356: Insurance companies are interested in being legally allowed to obtain the results of genetic testing before deciding on issuing insurance policies to potential buyers, which would lessen the problem of ________ in the health insurance market.

• A) moral hazard
• B) market signaling
• C) adverse selection
• D) risk-loving

---

Definitions:

Gross Sales

Gross Sales are the total sales income of a business before any deductions are made for returns, allowances, or discounts.

Sales Discounts

A decrease in the cost of products or services provided to consumers, usually to encourage prompt payment or large-scale buying.

Account Category

A classification or grouping used in accounting to organize financial transactions, such as assets, liabilities, revenue, and expenses.

Normal Balance

The side (debit or credit) of an account that is usually increased, reflecting its normal financial balance.