If the Herfindahl-Hirschman Index of an Industry Is Greater Than

question 145

Multiple Choice

If the Herfindahl-Hirschman Index of an industry is greater than 1,800, then the Antitrust Division of the Justice Department

• A) will not challenge any merger.
• B) considers the industry unconcentrated.
• C) considers the industry moderately concentrated.
• D) will challenge any merger that raises the index by more than 50 points.

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Definitions:

Discretionary Fiscal Policy

Involves the use of government spending and tax policies to influence the economy, based on current economic conditions and objectives.

Natural Rate

The natural rate is a concept in economics describing conditions where the economy is at equilibrium, with full employment and no inflationary or deflationary pressures.

Aggregate Supply

The aggregate amount of products and services that companies in an economy are prepared and able to offer at a specific general price level during a certain time frame.

Natural Rate

Refers to the equilibrium rate of unemployment or interest where the economy is stable, without accelerating inflation.