The Herfindahl-Hirschman Index is an approach to measuring market concentration by adding the ___________ of the market share of each firm in the industry.
a. average
b. mean
c. sum
d. square
d. square
The Herfindahl-Hirschman Index (HHI) is an approach to measuring market concentration by adding the square of the market share of each firm in the industry.
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Many health insurers require a deductible where the policyholder pays the first part of any loss. The use of a deductible most directly treats the problem of:
A. moral hazard. B. people going uninsured. C. adverse selection. D. free riding.
M1 differs from M2 in that:
A. M2 includes savings deposits, small-denomination time deposits, and money market mutual funds that are not included in M1. B. the assets in M2 are more liquid than the assets in M1. C. M1 includes currency and balances held in checking accounts, which are not included in M2. D. M1 is a broader measure of the money supply than M2.
One of the functions of the Federal Reserve System is the
a. issuance of federal government bonds b. collections of tax revenues from banks c. spending of federal funds on construction projects d. manufacturing of coins e. clearing of checks between banks located in different parts of the country
Refer to the given figure where the nominal interest rate equals 6 percent and the money supply equals 600.
If the Federal Reserve wants to raise the interest rate to 8 percent, it must ________ the money supply to ________.
A. decrease; 400 B. increase; 800 C. decrease; 800 D. increase; 400