1. True/False: Measures of industrial concentrations are designed to measure the
ID: 1120364 • Letter: 1
Question
1. True/False: Measures of industrial concentrations are designed to measure the ability to control prices.
2. True/False: The reason for higher capital requirements on depository institutions is that capital acts as a buffer against loan losses.
3. True/False:
The national defense argument in favor of trade restrictions concerns only the protection of vital industries during times of wa
The national defense argument in favor of trade restrictions concerns only the protection of vital industries during times of wa
Explanation / Answer
Ans:
1) False
concentration ratio measure the market concentration (market share) of the large firms.These concenration ratios show the extent of market control by the largest firms in the industry. It is also used to understand the industry as oligopolistic.
2) True
The regulatory requirements of higher capital acts as a buffer during adverse economic and financial situations such as loan losses.
3) False
As per national defense argument some industries need to be protected from import competition as their output is vital for national defense.
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