"There is evidence that the string of U.S. bank closings in the early 1930s helped start and worsen the Great Depression." Discuss
What will be an ideal response?
Bank Failure can harm the economy's macroeconomic stability (keep in mind that safeguards intended to reduce the risk of bank failure were put in place after the Great Depression). One bank's problems may spread to sounder banks if they are suspected of having lent to the bank in trouble. This leads to a drastic reduction in the banking system's ability to finance investment and consumer-durable expenditure, so the economy slips into recession (or worse in the case of the Great Depression).
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If you are informed copper prices will fall in the next few months, you should ________ copper futures
But if that information becomes common knowledge, others will do the same thing, and the price of copper futures will ________. A) buy; rise B) sell; rise C) buy; fall D) sell; fall
According to the law of diminishing returns, an additional unit of
A) capital produces more output than an additional unit of labor. B) labor decreases output. C) labor produces more output than the previous unit. D) labor produces less output than the previous unit.