Explain the new guidelines used by the Department of Justice and the Federal Trade Commission for evaluating proposed mergers.
What will be an ideal response?
Companies involved in a merger are allowed to present evidence that the merger will reduce costs and lead to greater economic efficiency. The Department of Justice and the Federal Trade Commission also consider the effect the merger will have on market competition, and then weigh the increase in efficiency against the potential anticompetitive effects of the merger. If the anticompetitive effects of the merger outweigh the potential for greater efficiency, then the government will block the merger.
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Refer to Table 20.1. George is a single taxpayer with an income of $65,000. If George had received a raise of $3,500 at the beginning of the year, his marginal tax rate would be
A) 22.99%. B) 23.75%. C) 38%. D) 95%.
If the central bank targets interest rates, then the LM curve is
a. vertical. b. horizontal. c. upward sloping. d. downward sloping.
Suppose that a monopoly is earning economic profits in the short run. As a result,
a. no new firms will enter the industry because of barriers to entry b. the monopolist will increase its price and lower its output c. the market supply curve will shift to the right d. profits will fall as new firms enter the market e. the market demand curve will shift to the left
Which of the following is not a financial asset?
a. a corporate bond b. a piece of real estate c. an IOU d. a share of Coca-Cola stock e. a Treasury bond