Refer to Figure 26.5. Which firm faces possible retaliation from rival firms?
A. Firm D.
B. Firm A.
C. Firm B.
D. Firm C.
Answer: D
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A requirement for acquiring a related firm to generate value is
a. it be profitable b. you be profitable c. y ou will alter operations because of the acquisition d. all synergies between the firms were exploited before the acquisition
An increase in aggregate demand is most likely to cause an increase in the price level when the economy is
a. operating near full employment. b. on the horizontal part of the aggregate supply curve. c. operating with high unemployment. d. operating with substantial excess capacity.
A new government study reveals that daily consumption of peanut butter increases life expectancy by 10 years. What will this do to the input markets for peanuts and peanut butter factory workers? Assuming bologna is a substitute for peanut butter, what will happen in the market for bologna factory workers?
The theory of rational expectations concludes that
A. the public's expectations can influence the outcome of monetary policy, but not of fiscal policy. B. the public's expectations can influence the outcome of fiscal policy, but not of monetary policy. C. the public's expectations as to the effects of economic policies will tend to reinforce the effectiveness of those policies. D. by reacting in its self-interest to the expected effects of stabilization policy, the public will tend to negate the impact of those policies.