Suppose that insurance companies in Ohio are reluctant to offer fire insurance to firms in lowincome neighborhoods

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Suppose that insurance companies in Ohio are reluctant to offer fire insurance to firms in lowincome neighborhoods because of the prevalence of arson fires in those neighborhoods. Suppose that the Ohio state legislature passes a law stating that insurance companies must offer fire insurance to every business in the state and may not take into account the prevalence of arson fires when setting insurance premiums. What will be the likely effect on the market for fire insurance in Ohio?

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Money Banking And The Financial System

ISBN: 1801

3rd Edition

Authors: R. Glenn Hubbard, Anthony Patrick O'Brien

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