Compulsory Liability Insurance Laws Are Designed To

question 29

Multiple Choice

Compulsory Liability Insurance laws are designed to:

• A) reduce automobile insurance rates
• B) decrease the number of people who carry automobile insurance
• C) reduce the number of automobile accidents
• D) force individuals to purchase auto liability insurance

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Definitions:

Replacement Investment

Expenditures made to replace worn-out or outdated capital goods to maintain productive capacity.

Gross Investment

The total amount of investment in capital goods in an economy over a specific period, not accounting for depreciation.

Depreciation

A reduction in the value of an asset over time due to wear and tear or obsolescence.

Net Investment

The net expenditure on acquiring new capital assets after deducting the depreciation of the present capital assets.