Market Failures

question 120

Multiple Choice

Market failures

• A) are usually caused by government interference in the economy.
• B) prevent the price system from attaining economic efficiency.
• C) encourage people to purchase more of a good than they really want.
• D) encourage businesses to produce more of a good than they really want to.

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Definitions:

Universal Life Insurance

A form of straight life insurance that allows the policy owner flexibility in choosing and changing terms of the policy.

Policy Owner

The individual or entity that holds and controls an insurance policy and has the right to exercise all privileges under the contract.

Face Value

The nominal or stated value of a financial instrument or document, such as a bond or stamp, not necessarily its market value.

Premiums

The amount of money charged by an insurance company for active coverage.