ba 3300 notes #4

Question 1

Share of the market held by the X largest firms.

Answer 1

Concentration ratios

Question 2

defined as sum of squared market shares s (in %) for all n active firms in an industry

Answer 2

The Herfindahl-Hirschman Index (HHI)

Question 3

determines the cost of short-term (interbank) borrowing. Used to stimulate the economy or prevent it from overheating. Aside: yield curve inversion signals “bad” long-term outlook.

Answer 3

Federal Funds Rate

Question 4

M2 consist of currencies outside the US treasury, banks, and demand deposits at commercial banks, and other liquid deposits such as saving deposits.

Answer 4

Money Supply in the US