Without Competition, There Is a Tendency for a Government-Run or Regulated

question 45

Multiple Choice

Without competition, there is a tendency for a government-run or regulated monopoly to:

• A) keep prices constant.
• B) become inefficient by passing higher costs on to consumers.
• C) find ways to decrease costs so as to increase profits.
• D) become a natural monopoly.

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Definitions:

Commercial Bank

A commercial bank is a financial institution that offers a range of services including accepting deposits, providing loans, and offering investment products to individuals and businesses.

Liability

A financial obligation or responsibility that an individual or entity owes to another, which is required to be settled in the future.

Required Reserve Ratio

The fraction of deposits that banks are required to hold in reserve and not lend out.

Checkable Deposits

Bank account balances that can be easily withdrawn or used for payments through checks, debit cards, or electronic transfers.