Explain the "too big to fail" doctrine
During a financial crisis, some financial institutions may be in danger of failing, The failure of a single institution is a negative event but might not be too damaging to the economy as a whole. However, a very large bank or other financial institution may be linked to other financial institutions to which funds are collected and disbursed. If the larger bank fails initially, there could be a ripple effect in which additional small and large financial institutions fail also. This type of systemic risk makes these large institutions "too big to fail." As such, the government is more likely to regulate them very strictly and the government is also more likely to bail out such institutions in order to prevent a more massive financial crisis.
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A. individual choices and group behavior in individual markets. B. production in specific markets. C. the performance of national economies and ways to improve that performance. D. prices in specific markets.
Patents are ________ barriers to entry and public franchises are ________ barriers to entry
A) legal; legal B) legal; natural C) natural; legal D) natural; natural
If the MPC = 0.80, the tax multiplier is
A) -2. B) -4. C) -5. D) -8.
Government controls over market prices are often enacted to benefit a specific group.
Answer the following statement true (T) or false (F)