the economics of money, banking, and financial markets

337 #

© 2014 Pearson Canada Inc.#

24. The Federal Reserve Board set up a ____ credit facility to provide liquidity to AIG.
    A) $85 billion
    B) $8.5 billion
    C) $85 million
    D) $8.5 million
    Answer: A
    Diff: 1 Type: MC Page Ref: 274
    Skill: Recall
    Objective List: 12.1 Identify the important aspects of the insurance industry

2 5) An insurance management tool to discourage policyholders from engaging in risky activities
that make an insurance claim more likely is known as a/an ____.
A) screening
B) restrictive provision
C) deductible
D) coinsurance
Answer: B
Diff: 1 Type: MC Page Ref: 276
Skill: Recall
Objective List: 12.1 Identify the important aspects of the insurance industry

26. 
    

    To reduce adverse selection, insurance providers collect information on policyholders. This
    is known as ____.
    A) screening
    B) provision
    C) deduction
    D) coinsurance
    Answer: A
    Diff: 1 Type: MC Page Ref: 275
    Skill: Recall
    Objective List: 12.1 Identify the important aspects of the insurance industry

    
    


27. 
    

    An insurance management tool to reduce moral hazard is to ____.
    A) charge risk-based premiums
    B) not allow restrictive provisions
    C) reduce the deductible to zero
    D) prohibit coinsurance
    Answer: A
    Diff: 1 Type: MC Page Ref: 276
    Skill: Recall
    Objective List: 12.1 Identify the important aspects of the insurance industry