Question

From the standpoint of the economy as a whole, the role of insurance is A. to entice risk-loving people to become risk averse. B. to promote the phenomenon of adverse selection. C. not to eliminate the risks inherent in life, but to spread them around more efficiently.D. not to spread risks, but to eliminate them for individual policyholders. E. to eliminate the more hazard problem.

Answer 1

Answer:

C. not to eliminate the risks inherent in life, but to spread them around more efficiently

Explanation:

Insurance is an agreement where the insurer agrees to cover the losses that might arise if certain events occur to the insured.

Moral hazard and adverse selection are some of the negative issues that arise as a result of insurance.

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