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 policy holders.

Question

Quizplus · Accepted Answer

The role of insurance in the economy is to spread risks around more efficiently, rather than eliminating them completely for individual policy holders. Insurance companies pool the risks of many individuals and businesses, allowing the costs of unexpected events to be shared among a larger group. This helps to stabilize the economy and mitigate the impact of large losses on any one individual or business. Insurance does not eliminate risks entirely, but rather helps to manage them more effectively.

From the Standpoint of the Economy as a Whole,the Role