While many analysts defended the actions taken by the Fed and the Treasury to respond to the financial crisis in 2008, others were critical of these actions. The critics were concerned that by not allowing large firms to fail
A) stockholders and bondholders of these firms were not allowed to receive the proceeds from the sale of assets that would have occurred if the firms had declared bankruptcy.
B) there is an increased likelihood that other firms will engage in risky behavior in the future with the expectation that they will also not be allowed to fail.
C) there will be less competition in the U.S. economy, which could led to higher prices for consumers.
D) smaller firms will resent not receiving similar assistance.
B
You might also like to view...
How can tax simplification be beneficial to the economy?
What will be an ideal response?
Production of a catheter in the U.S. requires either one skilled worker-day or two unskilled worker-days, while production of the same device in Guatemala, because of its relative lack of transportation and communications infrastructure, requires either three skilled worker-days or four unskilled worker-days. Production of a hammock in the U.S. requires one-fourth skilled worker-day or one-third unskilled worker-day, while production of a hammock in Guatemala requires one-third skilled worker-day or one unskilled worker day. If one hundred unskilled worker-days are moved from producing hammocks to producing catheters in the U.S., while one hundred twenty skilled worker-days are moved from producing catheters to producing hammocks in Guatemala, combined production of the two goods in the
two countries will change by A. no net change in production of the two goods would occur. B. five additional catheters and thirty fewer hammocks. C. thirty additional catheters and five additional hammocks. D. ten additional catheters and sixty additional hammocks.
Ford Motor Company started producing the Model A at plants scattered around the United States
A) to save on transport costs. B) because diseconomies of scale at its initial River Rouge plant resulted in high production costs. C) to locate its production centers closer to its customers. D) because it was not able to attract skilled workers in Michigan (where its first plant was located).
If the dollar price of yen rises, then:
A. the yen price of dollars also rises. B. the dollar depreciates relative to the yen. C. the yen depreciates relative to the dollar. D. the dollar will buy fewer U.S. goods.