Insurance to canadian exporters for accounts receivable

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Reference no: EM13735277

Export Development Canada (EDC) provides insurance to Canadian exporters for their accounts receivable from foreign buyers. If EDC charges an insurance premium that reflects the average level of risk of the exporting firms, it is only the most risky firms that will tend to purchase insurance. This is an example of

a. the free-rider problem.

b. adverse selection.

c. a public good.

d. a common property resource.

e. moral hazard.

Reference no: EM13735277

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