It has been argued that regulations can often be the source of innovation. Provide an example of this in the banking industry.
What will be an ideal response?
A good example of regulations leading to innovation would be the creation of bank holding companies. These companies have been around since the early 1900s and were created to get around both the laws prohibiting bank branching and the laws preventing banks from offering non-bank financial services.
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Discuss the effects of an unexpected decrease in the inflation rate policy on unemployment in the short run. If the reduction in inflation is permanent, what happens in the long run?
What will be an ideal response?
What are the distinguishing characteristics of monopolistic competition?
What will be an ideal response?
Keynesian economists believe monetary policy is more effective than fiscal policy in stabilizing the business cycle
a. True b. False Indicate whether the statement is true or false
A firm in a perfectly competitive industry will expand output as long as: a. marginal revenue is less than average revenue. b. marginal cost is less than marginal revenue
c. marginal cost is less than average total cost. d. marginal revenue is less than average total cost.