In a recession, an appropriate fiscal policy choice would be to
a. increase govt spending and decrease taxes
b. increase govt spending and increase the federal funds rate
c. increase taxes and decrease M1
d. increase govt spending and decrease taxes
Ans: a. increase govt spending and decrease taxes
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Managers of profit centers earn more when their divisions
a. increase their sales and increase their costs b. decrease their sales and increase their costs c. decrease the costs of the components for which they are responsible d. increase the costs of the components for which they are responsible
Suppose there are two industries, A and B. Suppose that mergers are proposed in both industries, and the Herfindahl-Hirschman Index would increase by 500 in each one. If antitrust officials allow the mergers in industry A but challenge the mergers in industry B, the most likely explanation is that
a. there are political motivations to antitrust enforcement b. industry A was already less competitive than industry B c. industry A had a balanced oligopoly and industry B did not d. industry A started as a more competitive industry than B e. antitrust authorities made a random decision