Define and Explain D'Aveni's 'Hypercompetition' Concept

question 6

Essay

Define and explain D'Aveni's 'hypercompetition' concept.What are the major competitive arenas for it to occur?

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Definitions:

Excess Reserves

The funds that banks hold over and above the required reserve ratio set by the central bank, which can be loaned out or invested.

Required Reserves

The portion of depositors' balances that banks must have on hand as cash or in reserves at a central bank, used as a measure to ensure liquidity.

Excess Reserves

Banks' reserves held at the central bank over and above the required minimum, which can influence the banks' ability to lend and thus affect the money supply.

Federal Reserve System

The central banking system of the United States, responsible for monetary policy, regulation of banks, and maintaining financial stability.