The government would challenge any merger in an industry if (i) the post-merger Herfindahl index would exceed 1,000, and (ii) the merger would increase the index by more than 100 points
Indicate whether the statement is true or false
false
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In both price-taker and competitive price-searcher markets, when an increase in market demand disrupts a long-run equilibrium, it will lead to
a. higher short-run prices and long-run profits. b. higher short-run prices, short-run profits, and the entry of additional firms into the market. c. higher short-run prices and the exit of firms from the market due to economies of scale. d. no change in prices in the short run, but new firms will enter in the long run.
A bank is "loaned up" when
A) legal reserves are zero. B) excess reserves are zero. C) primary reserves are zero. D) required reserves are zero.
After a person buys insurance for his car, he will generally not care for his car as much as he otherwise would. This is an example of:
A. risk aversion. B. adverse selection. C. moral hazard. D. None of the statements is correct.
Owners and managers have cited three reasons for the creation of large financial firms or universal banks. What are these reasons?
What will be an ideal response?