Which of the Following Is a Negative Consequence to Having

question 24

Multiple Choice

Which of the following is a negative consequence to having insurance companies exist in a society?

• A) The asymmetric problem is reduced by insuring large groups of people.
• B) They are able to pool risks and give the sick the same access to medical care as the healthy.
• C) When they have insurance,individuals will consume more medical care than if they have to pay the full cost for care.
• D) When they have insurance,individuals will consume less medical care than if they have to pay the full cost for care.
• E) By insuring large groups of people,the asymmetric problem is increased.

---

Definitions:

Carrying Value

Another term for book value; it's the value at which an asset is recognized on the balance sheet.

Straight-Line Method

A method of calculating depreciation of an asset where the asset's cost is reduced equally over its useful life.

Amortize Discount

The process of gradually reducing the discount on a bond over the life of the bond.

Bonds Payable

Bonds payable refers to the long-term debt a company owes to bondholders, representing the amount that is due to be paid back at the bond's maturity date along with periodic interest payments.