The primary purpose of a conglomerate merger is
a. to achieve economies of scale available through increased production of a single good.
b. to allow for decentralized management by spreading authority of a number of people spread throughout company locations.
c. to avoid adverse effects of business cycles through diversification.
d. to reduce competition by purchasing and then closing competing firms.
c. to avoid adverse effects of business cycles through diversification.
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A decrease in aggregate demand will cause
A) prices to fall according to classical economists, and unemployment to increase according to Keynes. B) prices to fall and unemployment to increase according to both classical economists and Keynes. C) aggregate supply to fall according to classical economists, and prices to fall according to Keynes. D) aggregate supply to fall according to Keynes, and unemployment to increase according to classical economists.
Critics of the supply-side tax cuts proposed by the Reagan administration argued that lower taxes would:
a. increase the budget deficit. b. decrease money supply in the economy. c. reduce the aggregate price level. d. reduce the disposable income of households. e. reduce the volume of international trade.
Alland can produce 48 units of food per person per year or 16 units of clothing per person per year, and Georgeland can produce 16 units of food per year or 8 units of clothing. Which of the following statements is true? a. Alland has a comparative advantage, but not an absolute advantage, in producing clothing. b. Alland should specialize in the production of clothing
c. Georgeland has both a comparative and an absolute advantage in producing clothing. d. Alland should specialize in the production of food.
In the United States from 1929 to 1933, real GDP _____________ and the unemployment rate ________________
A. declined by 27 percent; rose to 25 percent B. increased by 21 percent; fell to 2 percent C. declined by 21 percent; rose to 27 percent D. declined by 40 percent; rose to 50 percent