If a life insurance company offers coverage regardless of age, health status, or smoking history, it is likely to suffer
A) moral hazard problems.
B) adverse selection problems.
C) lower costs.
D) low demand for its product.
B
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The figure above shows a
A) cross-section graph. B) scatter diagram. C) time-series graph. D) trend diagram. E) slope.
The Paradox of Thrift states that:
a. Any increase in saving by an individual will be offset by the interactions of the Three-Sector-Model. b.Saving by a nation (as a whole) is always good, while saving by individuals can lead to unexpectedly bad results. c. A nation-wide increase in saving might cause GDP to fall and, in the end, reduce, or not increase,the actual amount of saving. d. When a large portion of the market tries to de-lever its balance sheet, asset prices fall, thereby causing leverage to increase (not decrease). e. If not fully understood by users and regulators, financial instruments that were created to increase saving can end up causing saving to fall.