An insurance policy is a contract that:
a. benefits the parties if they have the same degrees of risk aversion.
b. benefits the parties if both of them are risk neutral.
c. benefits the parties if they have different degrees of risk aversion.
d. benefits the parties if either of them is risk neutral.
C
You might also like to view...
Using real GDP on the horizontal axis instead of real disposable income implies that a marginal propensity to consume 0.75 generates for every additional $100 of real GDP
A) $25 of additional saving. B) $56.25 of additional consumption spending. C) $25 of additional saving and taxes. D) $75 of additional real disposable income.
Automatic stabilizers lead to: a. a decrease in taxes collected by the government during an economic expansion. b. a decrease in unemployment compensation during a recession
c. Congressional action on changing the tax codes. d. none of the above