Nationwide Banking Might Reduce Bank Failures Due to

question 10

Multiple Choice

Nationwide banking might reduce bank failures due to

• A)reduced competition.
• B)reduced lending to small businesses.
• C)diversification of loan portfolios across state lines.
• D)elimination of community banks.

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Definitions:

Perfectly Competitive

A market structure characterized by many buyers and sellers, homogeneous products, and free entry and exit from the market.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually pay.

Single-Price Monopolist

A market dominance condition where a monopolist charges the same price for all units of a product sold to every consumer.

Perfectly Price Discriminate

A theoretical pricing strategy where a seller charges the maximum price each individual consumer is willing to pay, capturing all consumer surplus.