Discuss the primary causes of bank failures in the United States during the late 1920s and early 1930s.
What will be an ideal response?
Answers will vary but should demonstrate understanding of the various factors that led to bank failures during this period. One possible answer is: In some cases, bank failure resulted from imprudent management or criminal activity, but most of the time, banks in rural areas closed when low farm prices resulted in farmers not being able to pay off the loans when they came due. This created a strain on the banks, and when rumors spread that a bank was in trouble, worried depositors withdrew their money. At the time, deposit insurance did not exist, so a bank failure meant that deposited money would be lost. Even conservatively managed banks did not have sufficient cash reserves to meet the withdrawal requests. As banks began to fail, it created a ripple effect that government efforts were too late to prevent.
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Under autarky, consumer surplus is represented by the area
A) above the supply curve and below the equilibrium price. B) above the demand curve and below the supply curve. C) below the demand curve and above the equilibrium price. D) above the supply curve and below the demand curve.
The artist Pablo Picasso sketched a woman tourist and charged her a lot for just a few minutes work. By his response, this is an example of:
a. Overcharging b. Getting paid for one's life experience, expertise c. Agreement on the woman's part about "fair value" d. Material resources
In short-run perfectly competitive equilibrium, which of the following is alwaystrue?
a. Profit equals zero. b. Profit can be negative, zero, or positive. c. Profit can be zero or positive, but not negative. d. Profit is positive, otherwise firms would not produce.
National health insurance programs:
A. can increase use of health clinics versus traditional village doctors, who often have no medical training. B. are usually too costly for developing nations to implement. C. have solved the problem of providing high-quality care in places like India. D. are always less efficient than privatized programs.