Tobin's q theory adds to neoclassical theory because it ________
A) illustrates the important relationship between tax rates and the incentive to labor
B) emphasizes the role played by asset price fluctuations on investment spending
C) highlights the impact of a tax increase on business investment
D) underlines the relationship between financial innovation and the financial crisis of 2007-2009
B
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Shoe leather costs are
A) the costs in time and effort incurred by people and firms who are trying to minimize their holdings of cash because of inflation. B) the costs of changing prices, such as printing and mailing catalogues. C) the costs of the redistribution of wealth between lenders and borrowers. D) the costs associated with the confusion of prices as signals.
The price elasticity of demand for labor will be smaller, the
A) smaller is the price elasticity of demand for the final product. B) easier it is to employ substitute inputs in production. C) larger is the proportion of wage costs in the total cost of production. D) longer is the time period under examination.