What is meant by predatory dumping? How likely is it for this to occur in the United States? Discuss
What will be an ideal response?
Predatory dumping refers to a situation where a foreign firm charges a price that is so low it is able to capture the local market. Once obtained, the foreign firm then acts like a monopolist. Predatory dumping is extremely unlikely in the United States. When the foreign firm raises its price, nothing prevents new (possibly local) firms from entering the market. Moreover, the U.S. market is so large, it is doubtful that any foreign monopolist could satisfy U.S. demand.
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According to the bank reserve equation, the largest factor supplying reserves to the banking system is
A) Federal Reserve purchases of government securities. B) Treasury currency outstanding. C) float. D) currency in circulation.
If the Federal Reserve increases the legal reserve requirement on deposits,
a. the money stock will rise and the money multiplier will fall. b. the monetary base will rise and the money multiplier will fall. c. both the monetary base and the money stock will fall. d. neither the monetary base nor the money stock will rise.