Gretchen Morgenson and Joshua Rosner Argued That the Main Reason

question 58

Multiple Choice

Gretchen Morgenson and Joshua Rosner argued that the main reason for the most recent financial crisis was that

• A)the Federal Reserve had too much control over the financial system.
• B)no one could see the risk in the financial market at that time.
• C)there were too many banks and other financial institutions in the United States.
• D)there were too many government regulators.
• E)government regulators were being "captured" by banks.

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Definitions:

X-Inefficiency

A concept where a firm operates with higher costs than are necessary due to lack of competition or internal inefficiencies.

Economies Of Scale

Cost savings that accrue to firms from upscaling their production operations, where there's a typical decrease in the cost per unit with larger production volumes.

Average Cost

The sum of all production expenses divided by the quantity of items made, showing the expense for each unit of product.

Purely Competitive Equilibrium

A market state characterized by a perfect match between supply and demand, resulting in an optimal distribution of resources without any single buyer or seller influencing the price.