According to the U.S. Department of Justice Merger Guidelines, a Herfindahl-Hirschman index (HHI) above ________ is associated with a highly concentrated industry. Therefore, if the automobile industry had an HHI of 2,200, then a vertical merger between GM and one of its suppliers likely would be:
A. 2,400 and approved since the HHI is below the acceptable threshold
B. 1,800 and rejected since the HHI is above the acceptable threshold
C. 1,300 and rejected since the HHI is above the acceptable threshold
D. None of the answers are correct
Answer: D
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If a country had a CPI of 105.0 last year and a CPI of 102.0 this year, then
A) the average prices of goods and services increased between last year and this year. B) the average prices of goods and services decreased between last year and this year. C) the average quality of goods and services decreased between last year and this year. D) there was an error when calculating the CPI this year. E) the quantity of consumer goods and services produced decreased between last year and this year.
A firm's economic profit is the difference between its total revenue and total costs, including the opportunity costs of the resources used in the business
a. True b. False Indicate whether the statement is true or false
Housing prices in the United States fell sharply in 2007 and 2008, contributing to a severe recession as the AD curve shifted leftward. The ordinary AS/AD model would predict that falling short-run aggregate supply would bring deflation and move the economy back to potential output. Which of the following describes the impact of dynamic feedback effects on this return to potential output?
A. Falling house prices could cause people to buy more houses than they really need, creating a further crisis as another wave of foreclosures and bankruptcies occurs. B. The deflation will be counteracted by increases in the money supply from the Federal Reserve, preventing the price adjustment and keeping the economy below potential output. C. Expectations that prices might fall further could cause people to reduce spending, shifting the AD curve further to the left. D. As the SAS curve shifts downward, firms respond by increasing their investment in capital equipment, but only rehired a few of the laid-off workers, therefore, employment did not return to normal.
Unemployment compensation payments:
A. rise during a recession and thus reduce the severity of the recession. B. rise during a recession and thus increase the severity of the recession. C. rise during inflationary episodes and thus reduce the severity of the inflation. D. fall during a recession and thus increase the severity of the recession.