In Addition to Having a Direct Effect on Increasing Adverse

question 30

Multiple Choice

In addition to having a direct effect on increasing adverse selection problems,increases in interest rates also promote financial crises by ________ firms' and households' interest payments,thereby ________ their cash flow.

• A) increasing; increasing
• B) increasing; decreasing
• C) decreasing; increasing
• D) decreasing; decreasing

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Definitions:

Premiums

A designated amount of money paid at regular intervals by an individual or entity for a policy or service, especially in the context of insurance.

Medico-legal Deaths

Pertains to deaths that are investigated by legal authorities to determine the cause and manner, especially when they are unexpected, suspicious, or involve unexplained circumstances.

Autopsy

A pathologist’s medical examination of the organs of the dead body to determine the cause of death.

Practical Experience

Hands-on or direct involvement in activities or work, gaining knowledge and skills through doing rather than theoretical learning.