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Numerous times in history

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2. Numerous times in history, the courts have issued consent decrees requiring large companies to break up into smaller competing companies for violating the antitrust laws. The two best-known examples are American Telephone and Telegraph (AT&T) in the 1980s and Microsoft 20 years later. (AT&T was broken up into the ?Baby Bells?, but the Microsoft breakup was successfully appealed, and the breakup never occurred.);Many argue that breaking up a monopoly is a Pareto-efficient change. This interpretation cannot be so because breaking up a monopoly makes its owners (or shareholders) worse off. Do you agree or disagree? Explain your answer.;5. The Federal Reserve Board of Governors has the power to raise or lower short-term interest rates. Between 2005 and 2006, the Fed aggressively increased the benchmark federal funds interest rate from 2.5 percent in February 2005 to 5.25 percent in June 2006. Assuming that other interest rates also increased, what effects do you think that move had on investment spending in the economy? Explain your answer. What do you think the Fed's objective was?

 

Paper#25809 | Written in 18-Jul-2015

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