Which of the Following Is Correct

question 11

Multiple Choice

Which of the following is Correct?

• A) the financial position of an entity with a 2-to-1 reserve-to-surplus ratio is less affected by variability in its loss reserves than is an entity operating at 4-to-1 ratio.
• B) the financial position of an entity with a 2-to-1 reserve-to-surplus ratio is more affected by variability in its loss reserves than is an entity operating at 4-to-1 ratio.
• C) the financial position of an entity with a 4-to-1 reserve-to-surplus ratio is less affected by variability in its loss reserves than is an entity operating at 2-to-1 ratio.
• D) the financial position of an entity with a 4-to-1 reserve-to-surplus ratio is more affected by variability in its loss reserves than is an entity operating at 2-to-1 ratio.

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Definitions:

Short Run

A period in economic theory during which at least one input (like capital) is fixed, contrasting with the long run where all factors of production are variable.

Prices

The amount of money expected, required, or given in payment for something.

Unemployment

Unemployment refers to the situation when individuals who are able and willing to work cannot find employment.

Price Level

The median price level of all goods and services currently offered in the economy.