Which of the Following Is a Reason That Social Insurance

question 52

Multiple Choice

Which of the following is a reason that social insurance programs exist?

• A)to compete with private insurance programs
• B)to provide a base of economic security
• C)to provide needs-tested benefits to low-income individuals
• D)to reduce involvement of the government in insurance markets

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Definitions:

Competitive Equilibrium

A market situation where supply equates demand, leaving no incentive for price changes, assuming all agents are price-takers.

Perfect Substitutes

Items that can replace each other without affecting the consumer's satisfaction negatively.

Perfect Complements

Goods that are consumed together in fixed proportions because the consumption of one enhances the value or utility of the other.

Pareto Optimal

A resource allocation condition wherein it is infeasible to make improvements for any individual or preference without imposing disadvantages on at least one other.