CGAP Effect Is the Relationship Between Changes in Interest Rates

question 58

True/False

CGAP effect is the relationship between changes in interest rates and changes in net interest income.

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Definitions:

Moral Hazard

A situation in economics where one party is more likely to take risks because another party bears the costs of those risks.

Insurance Co-pays

Insurance co-pays are fixed amounts that a policyholder must pay out-of-pocket for a covered healthcare service, with the insurance company covering the remaining costs.

Deductibles

The amount paid out of pocket by the policyholder before an insurance policy begins to cover expenses.

Consumer Surplus

The difference between the maximum price a consumer is (or consumers are) willing to pay for an additional unit of a product and its market price; the triangular area below the demand curve and above the market price.