Explanation:
Oracle9i introduces the MERGE statement to enable you to retrieve rows from a source table and either update existing rows or insert new rows into a destination table. You update the row in the destination table if there is a matching row in the destination table; otherwise, you insert a new row into the destination table. You can specify the basis for the match with a condition in the ON clause. You specify the UPDATE in the WHEN MATCHED clause and you specify the INSERT in the WHEN NOT MATCHED clause.
Incorrect Answers:
1: For each row from T2, it updates the row if it exists within table T1; otherwise it inserts the row into T1.
2: It does not create a natural join of tables T1 and T2.
3: It does not create a Cartesian product of table T1 and table T2.
Reference:
OCP Oracle9i Database: New Features for Administrators, Daniel Benjamin, p. 253
Chapter 5: Language Enhancements
Oracle 9i New Features, Robert Freeman, p. 122-123
Chapter 4: New Oracle9i Database DDS and Data-Warehouse Features

---