To the extent that firms base investment decisions on current profits,
a) Tobin’s q theory is supported
b) investment spending tends to destabilize the economy
c) resources are efficiently allocated
d) the hypothesis that available cash flow drives investment is rejected
e) taxes, depreciation, and interest rates are irrelevant
b) investment spending tends to destabilize the economy
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A monopoly incurs a marginal cost of $1 for each unit produced. If the price elasticity of demand equals -2.0, the monopoly maximizes profit by charging a price of
A) $1.00. B) $1.50. C) $2.00. D) $3.00.
Among non-Hispanic whites, blacks, and Hispanics, the group with the highest poverty rate is ______.
Fill in the blank(s) with the appropriate word(s).
Taking a limousine to a five-star restaurant in New York is a:
A. want to both Joe Average and Richie Rich. B. necessity to Richie Rich but a luxury to Joe Average. C. necessity to both Joe Average and Richie Rich. D. want to Richie Rich and a luxury to Joe Average.
Proponents of the minimum wage implicitly assume that the ________ if they discount the unemployment effects of the policy.
A. demand curve for unskilled workers is inelastic B. supply curve for unskilled workers is inelastic C. supply curve for unskilled workers is highly elastic D. demand curve for unskilled workers is highly elastic