What has been the general approach to the enforcement of antitrust laws based on the type of mergers and price fixing among firms?
What will be an ideal response?
Charges of price fixing among firms are vigorously investigated by the government and the practice of price fixing among firms when it is found is punished. Even actions that contribute to price fixing, such as agreements to split up the market, are punished.
The application of antitrust law to mergers varies based on the type of merger. Conglomerate mergers are generally permitted. Vertical mergers are not prohibited because they do not substantially lessen competition. Horizontal mergers are scrutinized, but may be permitted depending on the circumstances. If a firm is going bankrupt it can be permitted to merge with another firm. If an industry is subject to strong foreign competition, domestic firms in the industry may be permitted to merge. The circumstances are examined on a case-by-case basis to determine the degree to which competition might be lessened in an industry when there is a horizontal merger.
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The quantity theory of money is a proposition about
A) the nominal interest rate and the quantity of money demanded. B) the Fed's methods used to change the quantity of money. C) nominal and real interest rates. D) the relationship between financial assets and currency demanded. E) the relationship between a change in the quantity of money and the price level.
According to the book, the most important strategy to a firm is its
A) pricing strategy. B) new product strategy. C) cost control procedures. D) all of these choices were reported to be equally important.
The aggregate demand curve is downward sloping because:
A. an increase in the price level will cause an increase in spending. B. at lower price levels, real wealth decreases, causing a decrease in the quantities of goods and services demanded. C. at lower price levels, interest rates decrease, causing a decrease in the quantities of goods and services demanded. D. at lower price levels, exports increase, causing an increase in real GDP.
Governments sometimes subsidize domestic industries. When this occurs
A. the subsidized industries have an advantage in international markets relative to non-subsidized industries. B. firms cannot be guilty of dumping because their prices are not below their costs. C. the subsidized industries sell less in international markets because it is more profitable to sell domestically. D. the governments also impose tariffs on imports to protect the industries even more.