All of the Following Statements About the National Flood Insurance

question 29

Multiple Choice

All of the following statements about the National Flood Insurance Program (NFIP) are true EXCEPT

• A)the program will insure structures that were previously flooded.
• B)the program is experiencing increasing competition from private insurers.
• C)the program continues to generate large profits and is running at a surplus.
• D)the program is now using reinsurance to protect against catastrophic loss.

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Definitions:

Economic Profits

The difference between a firm’s total revenue and its total costs, including both explicit and implicit costs.

Exiting

The process of leaving or withdrawing from a particular situation, status, or location, often used in the context of businesses or markets.

Perfectly Competitive Market

A market structure characterized by infinite buyers and sellers, freedom of entry and exit, and perfect information, where no single entity can influence the market price.

Unique Goods

Products or services that are distinctive due to their rarity, design, or attributes, making them unlike any other in the market.