Which of the Following Statements Is Correct

question 72

Multiple Choice

Which of the following statements is correct?

• A)A high-risk person is more likely to apply for insurance than a low-risk person because a high-risk person would benefit more from insurance protection.
• B)A low-risk person is more likely to apply for insurance than a high-risk person because a low-risk person would benefit more from insurance protection.
• C)Insurance companies can fully guard against the problem of adverse selection,but they cannot fully guard against the problem of moral hazard.
• D)Insurance companies can fully guard against the problem of moral hazard,but they cannot fully guard against the problem of adverse selection.

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Definitions:

Salamon's Anatomy

A comprehensive framework or study by Lester Salamon that categorizes and analyzes the structures and functions of the nonprofit sector.

Nonprofit Organizations

Entities that are dedicated to furthering a social cause or shared goal without the intention of distributing profits to members or leaders.

Tax-Exempt Gifts

Donations made to qualified nonprofit organizations for which the donor can receive a tax deduction, under specific rules and limits set by tax authorities.

Charitable Giving

The act of donating money, goods, time, or effort to support nonprofit organizations or causes.