What hallmark of regulatory capture was seen at the treasury department during t

Question

What hallmark of regulatory capture was seen at the treasury department during the administration of the TARP program? A] Demimonde [B] Infestation C] Scale paradox D Barrier paradox The cobweb model uses the mathematical relationship between supply and demand to explain [A] Periodic oscillations in prices which reflect alternating and recurring shortages and surpluses in a market B Equilibrium price and quantity over time C Price differences in different markets or countries for the same product D] Why health care usually grows as a share of our economy but recently began to shrink

Explanation / Answer

1. The answer is ‘scale paradox’. Through the TARP program treasury purchased toxic assets and equity from financial institutions so that the financial sector is once again strengthened. The large financial institutions are being given an opportunity to once again become more nimble and

2. The answer is option “a” – periodic oscillations in prices which reflect alternating and recurring shortages and surpluses in a market.

The model explains the reasons due to which prices are subject to periodic fluctuations. It also describes cyclical demand and supply in a market. Shortages and surpluses arise due to a time lag between supply and demand decisions.

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