All of the following are social costs associated with insurance EXCEPT

Question

Question: All of the following are social costs associated with insurance EXCEPT

Options:

1.  the expense of doing business.
2.  fraudulent claims.
3.  inflated claims.
4.  increased cost of capital.

Answer 1

4. Increased cost of capital

All of the following are social costs associated with insurance EXCEPT increased cost of capital.

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More information:

Increased capital cost refers to the cost paid by a company for issuing one additional unit of debt or equity. The cost depend on how many additional units of debt or money the company wishes to issue.