Suppose there are five firms in the disposable diaper market. ...

[dejastew]

Suppose there are five firms in the disposable diaper market. Hug-Me's share is 30 percent. Plumper's share is 30 percent. Drippy's share is 20 percent. Kool Kid's share is 10 percent. Nappomatic's share is 10 percent.
 
  The Herfindahl-Hirschman Index in this industry is A) 100.
  B) 900.
  C) 1,350.
  D) 2,400.

Question 2

How do banks create liquidity?
 
  What will be an ideal response?

[emily12345]

Answer to Question 1

D

Answer to Question 2

Banks create liquidity because they accept short-term deposits and make long-term loans. The short-term deposits can be quickly and easily changed into moneyindeed, some of the deposits are money itself In exchange, the bank makes long-term loans that cannot be converted to money until their due date is reached.

[dejastew]

Excellent

[jackie]

Thanks for the timely response, appreciate it