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The economy would slow dramatically due to a shortage of bank loans.

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8y ago

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What if Banks decide to keep more of their assets as reserves in order to avoid risking a shortage of the required reserve?

It would NOT shrink the money supply, it would just cause the supply of money to grow at a slower pace. So it would decrease the rate of growth of the money supply.


What is the advantage and the dis advantage of free market economy?

A free enterprise economy is also known as capitalism. There are many advantages to capitalism because capitalism benefits everyone. Capitalism gives everyone the freedom to choose their own jobs and products without government intervention. However, a disadvantage is that companies tend to cut corners risking employees health and safety.


Disadvantages of capitalist society?

Economic, social & cultural polarization between property-owners and others; inefficient use of human capital through hereditary transmission of wealth & status; tendency to cycles of over-expansion and contraction; disproportionate political influence of propertied classes & sectional business interests; tendency to monopoly & homogenization without strong checks on elimination of competition; fuelling of consumer desire through marketing, risking exclusion & alienation of those of lesser means.


What are the disadvantages for a country and its people when participating in production of The Body Shop?

Participating in the production of The Body Shop can have several disadvantages for a country and its people. Firstly, reliance on the brand may lead to economic dependency, limiting the development of local industries. Additionally, there can be environmental concerns associated with sourcing natural ingredients, potentially harming local ecosystems. Lastly, labor practices may not always align with fair trade principles, risking exploitation of workers and undermining local labor rights.


What is the main reason that almost all large companies are corporations?

The main reason that almost all large companies are corporations is due to the limited liability protection they offer to shareholders. This structure allows individuals to invest in the company without risking personal assets beyond their investment in the corporation. Additionally, corporations can raise capital more easily through the sale of stock, which is crucial for growth and expansion. The corporate structure also provides advantages in terms of governance, continuity, and tax benefits.