Mergers harm society
A) True. Firms merge to avoid antitrust laws and increase their prices.
B) Maybe. It depends on whether the effect on prices is larger from reducing competition or increasing efficiency.
C) False. Firms gain economies of scale and pass the price savings on to their customers.
D) True. Total surplus is reduced when firms merge.
B
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The federal government debt ________ when the federal government runs a deficit and ________ when the federal government runs a surplus
A) increases; increases B) decreases; decreases C) increases; decreases D) decreases; increases
The investment demand curve will shift to the left as the result of:
A. Business pessimism about future economic conditions B. Limited available productive capacity C. An increase in the interest rate D. A decrease in business taxes