The link between corporate profits and investment
a) results from heavy reliance on internal financing
b) indicates that cash flow is probably the key variable driving investment
c) is the strongest empirical evidence of Tobin’s q
d) explains the persistent drop in investment that occurred throughout the 1990s
e) helps to keep investment fairly stable and countercyclical
a) results from heavy reliance on internal financing
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If a bond's coupon adjusts to pay a constant real rate of return, then an increase in inflation would cause
A) the nominal coupon payment to rise. B) the nominal coupon payment to fall. C) the nominal coupon payment to remain unchanged. D) the bond's price to fluctuate wildly.
Which of the following government entities relies most heavily on sales taxes?
a. local government b. state government c. federal government d. the Social Security Administration
Price discrimination refers to
A) selling a product at different prices according to the differences in marginal cost of providing it to different consumers. B) selling a product at different prices, with the price difference being unrelated to differences in marginal cost. C) charging the same prices to all consumers but selling them different quantities. D) a deliberate effort on the part of a monopoly producer to confuse consumers.
When there few close substitutes available for a good, demand tends to be
A) perfectly inelastic. B) perfectly elastic. C) relatively inelastic. D) relatively elastic.