Which of the following is a cost of providing federal deposit insurance?
a. Banks have more incentive to monitor loans with the result that their profits have declined and many have failed.
b. There are no significant costs to the insurance, only benefits.
c. Banks have less incentive to act responsibly with the result that they have made riskier loans and some have failed.
d. The insurance makes it more difficult to regulate banks.
e. The insurance makes it more difficult for the fed to run open market operations.
C
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An increase in consumer confidence will
A) not change autonomous consumption and rotate the consumption function downward. B) not change autonomous consumption and rotate the consumption function upward. C) increase autonomous consumption and shift the consumption function upward. D) decrease autonomous consumption and shift the consumption function downward.
Compared to a monopolistic competitor, a monopolist faces
A) a more elastic demand curve. B) a more inelastic demand curve. C) a demand curve that has a price elasticity coefficient of zero. D) a more elastic demand curve at higher prices and a more inelastic demand curve at lower prices.