The Department of Justice and the Federal Trade Commission use the HHI to determine whether to challenge mergers
a. True
b. False
A
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If a country is trying to recover from a recent recession, it is unlikely their government officials will decide to ________ because it would ________
A) raise interest rates; decrease aggregate demand B) institute a tax cut; increase aggregate demand C) raise interest rates; increase aggregate demand D) increase taxes; increase aggregate demand E) lower interest rates; decrease aggregate demand
Positive analysis of economic policy
A) examines the economic consequences of policies but does not address the question of whether those consequences are desirable. B) examines the economic consequences of policies and addresses the question of whether those consequences are desirable. C) generates less agreement among economists than normative analysis. D) is rare in questions of economic policy.
Country A has a capital—labor ratio that is initially twice as big as that of country B, but neither is yet in a steady state. Both countries have the same production function, f(k) = 6k1/2
Country A has a 10% saving rate, 10% population growth rate, and 5% depreciation rate, while country B has a 20% saving rate, 10% population growth rate, and 20% depreciation rate. (a) Calculate the steady-state capital—labor ratio for each country. Does the initial capital—labor ratio affect your results? (b) Calculate output per worker and consumption per worker for each country. Which country has the highest output per worker? The highest consumption per worker?
Adam Smith describes a visit to a car factory when discussing economies of scale in his book An Inquiry into the Nature and Causes of the Wealth of Nations
a. True b. False Indicate whether the statement is true or false