The Major Problems Caused by Imperfect Information in Insurance Markets

question 33

Multiple Choice

The major problems caused by imperfect information in insurance markets are

• A) moral hazard and adverse selection.
• B) deceptive applicants and fraudulent claims.
• C) ability to attract repeat customers and risk groups.
• D) major additional costs and separating insurance buyers.

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Definitions:

Adjustment Versus Transcendence

A concept contrasting the process of adapting to existing conditions with surpassing or going beyond these conditions.

Alienation

Alienation is the feeling of being isolated or estranged from oneself, others, or society, often discussed in psychology and sociology.

Congruent

The state of being in harmony or agreement, often used to describe authenticity or consistency between one's internal feelings and external expressions.

Impulse Control

The ability to resist or delay an immediate desire or urge in order to achieve a long-term goal or adhere to societal norms.