Question 58

If a soft drinks manufacturer merges with a drug company, this is called a ________ merger.

		conglomerate
		vertical
		horizontal
		natural

Question 59

As well as creating value directly themselves, most firms buy in certain value-chain activities, such as employing another firm to do their advertising, or using an external delivery firm to distribute their products. Outsourcing has the advantage of minimising transactions costs.

True

False

Question 60

Which of the following is NOT a common reason for a merger?

		To reduce uncertainty
		To increase competition
		To achieve economies of scale
		To achieve faster growth

Question 33 1 points Save Answer A country has the following items in its balance of payments: $ millions Exports of goods Imports of services Income ows and current transfers from abroad Imports of goods Exports of services Income ows and current transfers going abroad 30 Its balance of payments on current account is a deficit of $30m. 0 True 0 False Question 37 1 points Save Answer The following diagram shows sterling exchange rates (it is similar to Figure 13.2 in the text). 3.50 Japanese yen (100s) Australian dollar 115 US dollar euro 110 -Index (1/1/05 = 100) 3.00 105 100 2.50 95 Sterling ex. rate index (01/05 = 100) Foreign currency units per f1 90 2.00 - 85 1.50 - 80 75 1.00 + 70 1985 1990 1995 2000 2005 2010 2015 Between 2007 and 2009, in terms of the sterling exchange rate index, the pound depreciated by over 20%. O True O Falseluestlon 43 1 points Save Answer For a given amount of resources, Japan and the UK can produce the following quantities of motorbikes or bicycles: Motorbikes Bicycles Which statement is correct? 0 The UK has a comparative advantage in motorbikes. O The UK has a comparative advantage in bicycles. Q The UK has an absolute advantage in bicycles. 0 Japan has a comparative advantage in bicycles. IEStIOH 45 1 points Save Answer In a simple twocountry, twogood world, if the two countries, A and B, can produce the following amounts of the two goods, X and Y, for a given amount of resources: Good Y CountryA Country B 20 Assuming there are no transport costs in trade. Q Country B has a comparative advantage in both goods and will export both goods to country A. Q Neither country has a comparative advantage in either good and there are no economic gains from trading. Q Country B has an absolute advantage in good X and will export good X to country A. 0 Country B has a comparative advantage in both goods, but no trade will take place. Question 51 1 points Save Answer If two countries, A and B, can produce the following amounts of two goods X and Y for a given amount of resources: Good X Good Y Country A 10 7 Country B 12 10 Then country A has a comparative advantage in the production of Good X. O True O FalseQuestion 57 Copy of Study the data given below. Monthly Income (Sim) 400 450 500 Monthly Consumption Expenditure on Domestic Goods and Services (55m) 400 550 600 650 550 Given this data, the marginal propensity to consume domestically produced goods and services (mpcd) is 0 ace; 0 b.5 O c. 50 O (107 O (3,30 1 points Save