The Coase Theorem Points Out That Externality Problems Can Be

question 87

Multiple Choice

The Coase Theorem points out that externality problems can be eliminated if the number of parties involved is small and if property rights

• A) are granted solely to consumers.
• B) are granted solely to producers.
• C) are eliminated.
• D) are granted to either consumers or producers and transactions costs are low.

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Definitions:

Reserve Ratio

The fraction of deposits that banks are required to hold in reserve and not lend out, set by central banks to control the money supply and banking stability.

Depository Institutions Deregulation and Monetary Control Act

A U.S. federal law enacted in 1980 aimed at improving the Federal Reserve's control over monetary policy, deregulating certain aspects of the banking industry.

Legal Reserve Requirements

Legal reserve requirements are regulations set by a central bank that determine the minimum amount of reserves that must be held by a financial institution.

Depository Institutions

Depository Institutions are financial entities such as banks and savings associations that accept deposits from individuals and provide loans.