Explain why producers rather than consumers may be the beneficiaries of regulation. Does the evidence support this view?
The benefits of much economic regulation are concentrated on a small number of producers while the costs
are spread among millions of consumers. Therefore, the producers should be expected to get more involved
in the regulatory process than consumers. Evidence includes railroads and trucking under the ICC, and
import quotas in steel and automobiles.
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If a bank has excess reserves of $7,000 and demand deposit liabilities of $100,000, and if the reserve requirement is 15 percent, then the bank has actual reserves of
A) $17,000. B) $22,000. C) $27,000. D) $29,000.
Which of the following is NOT a characteristic of competitive markets?
A) standardized product B) purchases and sales of individual traders are small relative to the total volume traded C) prices adjust quickly D) there are relatively few sellers