If One of the Nation's Leading Banks Raises the Prime

question 1

Multiple Choice

If one of the nation's leading banks raises the prime rate of interest by a half of a percent,and within 24 hours all of the other U.S.banks raise their prime rates by the same percentage,this behavior would be

• A)an example of covert collusion.
• B)proof of the U.S.bank cartel at work.
• C)an example of illegal cutthroat price competition at work.
• D)an example of price leadership.

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Definitions:

Liability

An obligation or debt owed to another party, which can be a factor in personal and business finances.

Gain or Loss

The financial result from selling an asset for more (gain) or less (loss) than its purchase price, important for tax calculations related to capital gains and losses.

Section 1231 Property

Property related to the business or trade, the sale of which may result in ordinary income or capital gains treatment depending on the specifics of the transaction.

Trade or Business

Activities conducted for the purpose of income or profit, engaged in consistently and regularly to qualify as deductible business expenses.