Question

2. Is it better for our economy to allow free market forces to govern our financial...

2. Is it better for our economy to allow free market forces to govern our financial services or should there be more regulation by the Federal government and the Federal Reserve?

3.    Should consumers be more protected by better laws or should the idea of "consumer beware" apply in these markets? Has unfair, predatory lending been taking place at the expense of the borrower?

Homework Answers

Answer #1

Answer 2.

Allowing free market forces to govern financial services in the economy leads to major consequences such as abuse by major financial firms, cartels of firms to maximize profit, small financial firms may get eliminated from the market. The major financial firms may introduce some policies to grab the maximum share of the market if there is no government intervention. These policies may lead to the elimination of small firms and also decline of consumerism. Too much regulation by the Federal Reserve can also affect the interest of financial firms and thereby financial services. Therefore, the mix of Federal Reserve and market forces work thoroughly for the financial firms

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