The Problem of Adverse Selection

question 79

Multiple Choice

The problem of adverse selection

• A)implies that many people who do not need insurance coverage have it through group plans.
• B)means that those people who apply for insurance are the least likely to need insurance coverage.
• C)causes insurance underwriters to alter the health statistics of the general population when determining appropriate premiums.
• D)creates a savings element along with the insurance component of the premium and policy.

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Definitions:

Unilateralism

A foreign policy approach where a country acts independently and without the agreement or cooperation of other countries.

Expansion Theory

The idea that territories and nations should expand their dominion for economic gain, security, or national prestige.

Cold War

A period of geopolitical tension between the Soviet Union and the United States and their respective allies, characterized by threats, propaganda, and other measures short of open warfare, from about 1947 to 1991.

North Atlantic Treaty Organization

A military alliance formed in 1949 by countries in North America and Europe to provide collective security against aggression.