The Higher the Concentration Ratio in a Given Industry, The

question 65

Multiple Choice

The higher the concentration ratio in a given industry, the:

• A) closer the industry is to a perfectly competitive market structure.
• B) larger the market shares of the smallest four firms in the industry.
• C) closer the industry is to an oligopolistic or monopolistic type of market structure.
• D) smaller the market shares of the largest four firms in the industry.

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Definitions:

Money Creation

The process by which the money supply of a country is increased through activities primarily conducted by its central bank.

Monetary Control Act

A 1980 United States federal law that aimed to improve the Federal Reserve's control over monetary policy and to ensure more effective financial regulation.

Excess Reserves

The funds that banks hold over and above the legal requirement set by a central bank or banking regulator.

Commercial Bank

A firm that engages in the business of banking, accepting deposits, offering checking accounts, and making loans.