How does the Department of Justice deal with mergers of large companies?
a. It blocks all mergers.
b. It blocks any merger resulting in over 25% of market share.
c. It allows mergers that increase efficiency.
d. It allows mergers that reduce competition.
c. It allows mergers that increase efficiency.
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An individual is endowed with $100 of income in period 1, and will receive an income of 121 in period 2. The interest rate is 10%, and there are only 2 periods. In order to have the same level of consumption in both periods, each period’s consumption must be
a) 80 b) 100 c) 110 d) 110.5 e) 121
The marginal propensity to consume is always
a. a negative number b. larger than 1.0 c. larger than 10 d. greater than zero and less than 0.5 e. greater than zero and less than 1.0
When the government uses a command-and-control policy to solve an externality, it
a. is usually the most effective policy option available. b. creates policies that directly regulate behavior. c. usually involves taxing the consumption of a commodity. d. typically refers to the Coase theorem to structure the policy.
The inflation rate measures the average prices of goods and services in the economy
Indicate whether the statement is true or false