A conglomerate merger occurs when
a. the goods produced by the merging firms are not related
b. one firm produces goods while the other produces services
c. one firm is a domestic firm while the other is a foreign firm
d. the firms are in a buyer-seller relationship
e. the merging firms produce identical or close substitute goods
A
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Equilibrium in a competitive market results in the greatest amount of economic surplus from the production of a good or service
Indicate whether the statement is true or false
Why was running a budget deficit to build the U.S. highway system in the 1950s a benefit to the country?
a. The costs of building the highway system were so small that they were considered irrelevant. b. There were benefits of increasing potential GDP, so the increased costs were not considered. c. The benefits of it increasing potential GDP were greater than the increased costs of borrowing for the deficit. d. The costs of building the highways system were greater than the benefits of building the highway system.
The terms of trade
a. equal the equilibrium price in a competitive market b. equal a nation's imports minus its exports c. determine whether specialization according to comparative advantage is economically rational d. are equal to 1.0 in market equilibrium e. determine how the gains from international trade are distributed among countries
Output in the goods and services market will be sustained into the future
a. if aggregate demand and short-run aggregate supply are in balance. b. only when the prior choices of decision makers were based on a correct anticipation of prices. c. only when prices are rising. d. only when wage rates are declining.