Suppose that the widget industry has a Herfindahl-Hirschman index of 1,200 . Two firms have proposed a merger. Firm A has a current market share of 5 percent. Firm B has a market share of 7 percent
Will the Justice Department challenge the merger? Explain.
The merger will raise the Herfindahl-Hirschman index by 70 points [(122) - (52) - (72)]. Since the industry is only moderately concentrated, the Justice Department will only challenge a merger that increases the index by more than 100 points. Therefore, the merger will not be challenged.
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A change in the money supply creates demand and cost pressures that lead to future increases in the price level from which main sources? I. Excess demand for output and labor II. Inflationary expectations III. Raw materials prices
A) I B) II C) II and III D) I and II E) I, II, and III
Saving remaining constant, the average propensity to save declines with an increase in disposable income
a. True b. False Indicate whether the statement is true or false
The Fed can increase the money supply by conducting open market sales of U.S. Treasury Bonds, or by raising the required reserve ratio
Indicate whether the statement is true or false
The main difference between sales and excise taxes is that:
A. sales taxes apply to a wide range of products, while excise taxes apply only to a select group of products. B. excise taxes apply to a wide range of products, while sales taxes apply only to a select list of products. C. sales taxes are consumption taxes, while excise taxes are not. D. excise taxes are consumption taxes, while sales taxes are not.