A _________ is an agreement under which stockholders of several formerly-competing companies turn over their shares to a group that exercises voting control over the companies
a. trust
b. gentleman's agreement
c. holding company
d. pooling arrangement
a. trust
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Firms should stop borrowing funds
A. as soon as the bank raises the interest rate. B. when the MRP of borrowed funds is equal to the cost of borrowing. C. whenever the future of the firm looks gloomy. D. if their debts are more than 25 percent of the value of the firm.
A trade surplus occurs when:
A. a country purchases more from abroad than other countries purchase from it. B. a country sells more abroad than it purchases from abroad. C. a country's firms open more stores abroad than foreign firms open in the country. D. foreign firms open more stores in a country than the country opens in foreign countries.
According to the endowment effect, people are unwilling to sell a good they already own in which of the following situations?
a. if they are offered a price greater than the price they would pay if they did not already own the good b. if they are offered a price lower than the price they would have to pay to replace the good c. if they can't replace the good d. if the good was a gift that had great sentimental value
When a polluter has to bear the full social cost of their actions, they will
A) weigh the costs and benefits of each potential action and might decide to not stop polluting by paying a fine. B) go out of business since pollution abatement is expensive. C) will always decide to reduce the amount of pollution by reducing the quantity they produce. D) increase the price of the product and the quantity produced to pay for the additional costs.