Quiz 34

Question 1

Which of the following programs pose the risk of moral hazard?

Answer 1

👉🏽 a) bailing out banks

👉🏽 b) social insurance programs, such as food stamps

👉🏽 c) health insurance

Question 2

Which of the following are issues insu4ance providers have to deal with?

Answer 2

👉🏽 a) adverse selection

👉🏽 b) moral hazard

👉🏽 c) outright fraud

Question 3

If we are organizing a community-level insurance program, how many people should we recruit for the program?

Answer 3

👉🏽 We would want as many people as possible.

Question 4

Why do people use lending as a form of insurance? Why not just offer each other straightforward insurance?

Answer 4

👉🏽 a) lending in this way is a social accounting device

👉🏽 b) it is a way of keeping track of collective obligations

👉🏽 c) there is initial t4us5 due to a predicting financial relationship

👉🏽 d) it doesn’t look like charity