Quiz 36

Question 1

A variable interest fund can be _________for insurance markets.

Answer 1

👉🏽 good or bad

Question 2

Informal community insurance systems are not appealing to everyone. What are some situations which would inhibit the emergence of these systems, or make these systems harder to sustain?

Answer 2

👉🏽 1. Villages with a large transient population (migrant workers, etc.).

👉🏽 2. Villages with a group of rich people and a group of poorer people.

Question 3

TRUE or FALSE. Informal insurance tends to be concentrated among people who know each other.

Answer 3

👉🏽 True

Question 4

Weather-indexed insurance is a type of insurance where insurance-buyers are paid based on some weather index (i.e.. cm of rainfall), regardless of how the crops respond to the weather. Relative to o5her insurance schemes, weather-indexed insurance helps mitigate which of 5he following problems?

Answer 4

👉🏽 a) fraud insurance agents

👉🏽 b) adverse selection

👉🏽 c) aggregate shocks

👉🏽 d) moral hazard