Which situation indicates a mixed economy?

A Economic activity is controlled entirely by the private sector.

B Individual choices are unaffected by government actions.

C Services are provided by both private and public sectors.

D The government carries out all planning and decision making

What causes market failure?

A government provision of services

B social costs equal private costs

C the existence of external benefits

D the existence of perfect competition.

Which statement about interest rate changes is accurate?

A A fall in interest rates will always increase inflation.

B A rise in interest rates may increase cost-push inflation.

C A rise in interest rates will raise the level of investment in a country.

D Interest rate changes have no impact on the level of production.

1. (10 points) ASD Life is a leader in selling a fully underwritten 15-year renewable term insurance product. Policies are now reaching the renewal period and ASD has decided to introduce a new "Term-to-Term Replacement Program" to help manage replacement activity. This new program was designed to provide extra incentive to the agent by paying full first year commission for any replaced policy, whereas the previous program only paid 50%. The new replacement term policy will only require simplified underwriting. (a) (2 points) List other strategies that can help manage replacements. (b) (4 points) For a policyholder considering whether to replace their current term policy: (i) Describe the most appropriate problem-solving strategy. (ii) Describe the purchase decision process. (c) (4 points) Evaluate whether the pricing assumptions for the currently sold fully underwritten 15-year renewable term product need to be changed when the "Term-to-Term Replacement Program" is introduced. Justify your answer.3. (10 points) ABC Life is considering the feasibility of an Annuity/Long-Term Care Insurance (LTCI) combination product. (a) (/ point) List the key questions that should be answered at this stage of the product development process. (b) (3 points) While they determine whether to build a fully operational administrative system, ABC's approach is to put a manual administrative system in place so they can quickly launch their Annuity/LTCI product. Describe the advantages and potential hidden costs of this approach. (c) (6 points) (i) Describe the three common benefit structures of Annuity/LTCI combination products. (ii) For each benefit structure, demonstrate how it works by using a simple numerical example with an initial premium amount of 100,000, and a LTCI benefit of 4% of account value per month