Using Hindsight to Judge Whether Buying Insurance Was a Good

question 94

Multiple Choice

Using hindsight to judge whether buying insurance was a good idea or not:

• A)is the only way to properly measure the true cost of the insurance and its benefit.
• B)is not a good idea; you have to measure the decision considering the information available at the time.
• C)can prove that what was a good decision at the time can end up not being worth the cost.
• D)can help someone who is deciding whether or not to buy insurance in the future.

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Definitions:

Efficient Economy

An economic system in which resources are allocated in the most productive way, maximizing the output of goods and services.

Federal Reserve Notes

The official currency issued by the Federal Reserve System in the United States, commonly known as dollars.

Fiat Money

Money not redeemable for any commodity; its status as money is conferred initially by government decree but eventually by common experience.

Fiat Money

Currency that has value and is legally recognized for transactions solely because of a government decree, without backing by a physical commodity.