A. What is the difference between a horizontal merger and a vertical merger?
b. Give an example of each type of merger.
c. Could a horizontal merger be welfare improving?
What will be an ideal response?
a. A horizontal merger is a merger between firms in the same industry. A vertical merger is a merger between firms at different stages of production of a good.
b. Students can offer many different examples.
c. Yes, if there are economies of scale so that the merged firm can produce output at a lower average total cost.
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When two variables move in the same direction, they are said to be:
A) unitary correlated. B) uncorrelated. C) positively correlated. D) a negatively correlated.
To reduce the problems of illegal immigrants, should the United States license migrant workers from Latin America who want to work in the United States as visiting workers, as long as jobs are available?
What will be an ideal response?
When the CPI increases from one year to the next:
A. the cost of living has decreased. B. deflation has occurred. C. people need to spend more money to buy the same amount of goods as the previous year. D. All of these statements are true.
A political problem with discretionary fiscal policy is the
A. business cycle. B. split control of the legislative and judicial branches of government. C. Federal Reserve. D. political business cycle.