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:

Bureau of Labor Statistics

The U.S. government's entity charged with the acquisition and study of statistics regarding employment market dynamics, workplace environments, and price alterations.

Consumer Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, used to estimate the cost of living.

Basket of Goods

A selection of various items that are used to track inflation and the cost of living over time.

Consumer Price Index

An assessment method that evaluates the overall weighted price of a variety of consumer services and goods, like food, transportation, and healthcare, aimed at measuring the rate of inflation.