Suppose that two firms in an industry with a Herfindahl index of 5,000 announce a merger. The U.S. Justice Department concludes the merger will boost the index to 5,500. The antitrust authorities will most likely:
A. ignore this merger because of the relatively small increase in the Herfindahl index.
B. allow the merger but watch the new firm carefully for future violations of the antitrust laws.
C. allow the merger if foreign entry to the industry is possible.
D. prevent the merger, contending that it violates the Clayton Act.
Answer: D
Economics
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If the quantity of money supplied does not respond to changes in the interest rate, then the money supply curve is
A) vertical. B) horizontal. C) relatively flat but upward sloping. D) relatively steep but upward sloping.
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Refer to Figure 13-1. Ceteris paribus, a decrease in interest rates would be represented by a movement from
A) AD1 to AD2. B) AD2 to AD1. C) point A to point B. D) point B to point A.
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