Tobin’s q may be interpreted as a measure of
a) the quantity of a firm’s output
b) the optimal quantity of output for a monopolist
c) the relative importance of bond financing to equity financing
d) the rate of return on capital divided by the cost of capital
e) the useful life of physical capital
d) the rate of return on capital divided by the cost of capital
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If General Motors buys steel from Russia, then the purchase will be recorded in the:
A. U.S. current account. B. Russian government financial account. C. U.S. government financial account. D. U.S. financial and capital account.
A need to make choices exists because of
a. scarcity of resources. b. the abundance of goods. c. unlimited human needs and wants. d. both scarcity of resources and unlimited human needs and wants.
Describe appropriate discretionary fiscal policy according to Keynesian economics to smooth out the business cycle.
What will be an ideal response?
Real GDP measures the:
A. total dollar value of all goods and services produced within the borders of a country using current prices. B. value of final goods and services produced within the borders of a country, corrected for price changes. C. total dollar value of all goods and services consumed within the borders of a country, adjusted for price changes. D. value of all goods and services produced in the world, using current prices.