Which of the Following Statements Is Most CORRECT

question 36

Multiple Choice

Which of the following statements is most CORRECT?

• A) If a company that produces military equipment merges with a company that manages a chain of motels, this is an example of a horizontal merger.
• B) A defensive merger is one where the firm's managers decide to merge with another firm to avoid or lessen the possibility of being acquired through a hostile takeover.
• C) Acquiring firms send a signal that their stock is undervalued if they choose to use stock to pay for the acquisition.
• D) None of the statements above is correct.
• E) Answers a and c are correct.

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Definitions:

Aggregate Expenditure

The aggregate expenditure in an economy, which accounts for consumer spending, business investments, government spending, and the difference between exports and imports.

Interest Rate

The cost of borrowing money, typically expressed as a percentage of the amount loaned, charged by lenders to borrowers over a specific time period.

Quantity of Money

The accumulated total of monetary resources in an economy at a certain point in time.

Price Level

An index that measures the average of current prices across a wide range of goods and services compared to a base year.