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Export Development Canada (EDC) provides insurance to Canadian exporters for their accounts ...

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Export Development Canada (EDC) provides insurance to Canadian exporters for their accounts ...

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

▸ moral hazard.

▸ a common property resource.

▸ a public good.

▸ the free-rider problem.

▸ adverse selection.

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Microeconomics

Edition: 17^th

Author: Ragan

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