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Question
In the case of an insurance policy, _________ occurs when the existence of insurance encourages the insured party to take risks that increase the likelihood of an insurance payoff; _________ occurs when those most likely to get large insurance payoffs are the ones who want to purchase insurance the most.A)moral hazard; insurance market discrimination
B)moral hazard; insurance segregation
C)moral hazard; adverse selection
D)adverse selection; moral hazard
Answer
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