An increase in the production of capital goods and a reduction in the production of consumer goods would most likely lead to a faster rate of future economic growth.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 2Interlocking directorates are illegal under the Clayton Act only when their effect is to lessen competition substantially.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 3A subprime mortgage is:
a. a mortgage in which the borrower gets an interest rate below the prime rate.
b. a mortgage in which the interest rate is adjustable.
c. a mortgage for which the home is valued below its true market value.
d. a mortgage in which the borrower has a poor credit rating.
e. a mortgage for a home that was in foreclosure.
QUESTION 4Clustering:
a. occurs when government resources are diverted toward one particular sector of the economy.
b. takes place when new firms enter regions already thick with other firms in the same or similar industries.
c. occurs when there is a single firm in the economy that can charge different prices for the same product.
d. implies that consumers with similar tastes and preferences tend to stay in the same region.
e. occurs when all the firms in the industry sell identical commodities and charge identical prices for these commodities.
QUESTION 5The Sherman Antitrust Act was not specific enough to eliminate monopolies in the United States.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 6The U.S. banks have grown primarily through:
a. America's longstanding preference for big banks.
b. surviving banks buying up bankrupt banks.
c. excellent customer service.
d. mergers and acquisitions.
e. deposit insurance policy.
QUESTION 7Which of the following is an advantage of clustering?
a. New entrants can charge higher prices for products as compared to existing firms.
b. New entrants can have lower cost of gathering regional information about trends in the market.
c. New entrants can benefit from favorable terms of trade.
d. New entrants can engage in non-price competition with other firms in the industry.
e. New entrants can charge low prices for their products.
QUESTION 8Violations of the Sherman Antitrust Act have sometimes been punished by breaking up the offending firm into a number of smaller firms.
a. True
b. False
Indicate whether the statement is true or false
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