If Losses on a Particular Line of Medical Malpractice Insurance

question 90

Multiple Choice

If losses on a particular line of medical malpractice insurance were $650 million and premiums earned were $575 million, the loss ratio would be

• A)1.13 implying that this line of insurance is profitable.
• B)1.13 implying that this line of insurance is unprofitable.
• C)0.88 implying that this line of insurance is profitable.
• D)0.88 implying that this line of insurance is unprofitable.
• E)-$75 million implying that this line of insurance is unprofitable.

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Definitions:

Equilibrium GDP

Equilibrium GDP is the level of output where aggregate demand matches aggregate supply, resulting in a stable economy without tendencies to change.

Multiplier

A factor that quantifies how an increase in spending leads to an increase in national income and output, typically greater than the initial amount spent.

Balanced Budget

When federal tax receipts equal federal government spending.

Constitutional Amendment

A formal change or addition proposed and ratified according to the procedures specified in a constitution, altering the document's framework or principles.