Which two factors make regulating mergers complicated?
A) First, firms may lobby government officials to influence their decision to approve the merger. Second, by the time the government officials reach a decision regarding the merger, the firms often decide not to merge.
B) First, the time it takes to reach a decision to approve a merger is so long that the firms often have new owners and mangers. Second, by law, government officials are not allowed to consider the impact of foreign trade (exports and imports) on the degree of competition in the markets of the merged firms.
C) First, the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice must both approve mergers. Second, the concentration ratios that are used to evaluate the degree of competition the merged firms face are flawed.
D) First, it is not always clear what market firms are in. Second, the newly merged firm might be more efficient than the merging firms were individually.
Answer: D
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If national income increases by $20 million and consumption increases by $5 million, the marginal propensity to consume is
A) 4. B) 0.75. C) 0.5. D) 0.25.
The greater the marginal propensity to consume in the economy, the smaller the spending multiplier
a. True b. False Indicate whether the statement is true or false