Multiple Choice
Assume that flood insurance premiums are determined in the competitive market.Suppose that devastating floods along the Mississippi River have increased the degree of risk aversion among the insurance investors in this market.The _____ insurance shifts _____,leading to a(n) _____ in equilibrium premiums and a(n) _____ in the quantity of insurance bought and sold.
A) supply of;rightward;decrease;increase
B) demand for;leftward;decrease;decrease
C) supply of;leftward;increase;decrease
D) demand for;rightward;increase;increase
Correct Answer:
Verified
Correct Answer:
Verified
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