Which of the Following Is TRUE If the Insurance Market

question 191

Multiple Choice

Which of the following is TRUE if the insurance market is efficient?

• A) The deductibles eliminate moral hazard.
• B) Society as a whole engages in less risky behavior.
• C) It transfers risk from those who most want to get rid of it to those least bothered by the risk.
• D) Premiums are always kept to the level of a fair insurance policy.

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Definitions:

World Price

The international market price of a good, influenced by global supply and demand.

Free International Trade

The exchange of goods and services across international borders without restrictions such as tariffs, quotas, or subsidies.

Importer

An individual or company that buys goods or services from abroad for domestic use or sale.

World Price

The international market price of a good or service, determined by global supply and demand.