Related to the Economics in Practice on Page 357: Insurance

question 81

Multiple Choice

Related to the Economics in Practice on page 357: 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

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Definitions:

Interest Payments

Cash outflows from borrowers to lenders as compensation for the use of borrowed money.

Expansionary Policy

is a macroeconomic policy that aims to increase economic growth or reduce unemployment by increasing government spending, decreasing taxes, or both.

Excess Reserves

The amount of reserves held by a bank that exceeds the minimum reserve requirements set by the central bank.

Ability

Ability refers to the capacity or power of an individual or entity to do something effectively, often implying a skill or competence in a specific domain.