Which of the Following Events Would Probably Increase Your Auto

question 65

Multiple Choice

Which of the following events would probably increase your auto premiums?

• A)Celebrating your 25th birthday
• B)Getting married
• C)Trading in your 2004 Mercedes for a 2005 Ford Escort
• D)Increasing your collision deductible
• E)None of the above

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Definitions:

Well-functioning Market

A market where resources are allocated efficiently, information is freely available, transaction costs are low, and property rights are protected.

Nominal Interest Rate

The percentage increase in money that borrowers pay lenders, not adjusted for inflation.

Inflation

The pace at which prices for various goods and services climb, diminishing the value of money to buy them.

Storage Costs

Expenses associated with keeping goods stored in a warehouse or other facility until they are sold or used.