Which of the Following Statements Is Most CORRECT

question 48

Multiple Choice

Which of the following statements is most CORRECT?

• A) The high value of the U.S. dollar relative to Japanese and European currencies in the 1980s, made U.S. companies comparatively inexpensive to foreign buyers, spurring many mergers.
• B) During the 1980s, the Reagan and Bush administrations tried to foster greater competition and they were adamant about preventing the loss of competition; thus, most large mergers were disallowed.
• C) The expansion of the junk bond market made debt more freely available for large acquisitions and LBOs in the 1980s, and thus, it resulted in an increased level of merger activity.
• D) Increased nationalization of business and a desire to scale down and focus on producing in one's home country virtually halted international mergers in the 1980s.
• E) Answers a and b are correct.

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Definitions:

Producer Surplus

The differentiation between the selling price sellers are willing to accept and the price they eventually get.

Government Policy

Strategies and measures adopted by a government to guide its actions in the pursuit of specific goals and objectives.

Consumer Surplus

The difference between what consumers are willing to pay for a good and what they actually pay, representing the benefit consumers receive from purchasing the good at a lower price.

Price Floor

A government- or group-imposed price control that sets the lowest price at which a product can be sold.