A conglomerate merger occurs when
a. the goods produced by the merging firms are not related
b. one firm produces goods while the other produces services
c. one firm is a domestic firm while the other is a foreign firm
d. the firms are in a buyer-seller relationship
e. the merging firms produce identical or close substitute goods
A
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A permanent shift in the foreign exchange market supply and demand curves such that the fixed exchange rate is no longer an equilibrium rate is referred to as:
a. permanent devaluation. b. speculative disequilibrium. c. permanent revaluation. d. speculative equilibrium. e. fundamental disequilibrium.
Assume the standard trade model with two countries (Alpha and Beta), two goods (food and drink), and two factors of production (land and labor). Further assume that Alpha is relatively labor-abundant and food is relatively land-intensive. If the countries engage in free trade, Alpha will
A. import both goods. B. export food and import drink. C. export drink and import food. D. export both food and drink.