According to Tobin's q theory, the principal objective of investment is ________
A) to increase eligibility for the investment tax credit
B) to expand production
C) to increase the market value of the firm
D) to lower the replacement cost of installed capital
C
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Wartime economic mobilization resulted in:
a. increased hours for workers. b. dramatic increases in the industrial accident rate. c. some reduction in the quality of output. d. Increased production rates. e. All of the above.
In which of the following examples is excess burden not present?
a. Harriet decides to give up her Saturday hours at her law office after income tax rates rise. b. Rudolf still smokes three packs a day even after the excise tax on cigarettes rose 10 cents a pack. c. Wilma reduced the automatic payroll deduction to her savings account after the tax on interest was imposed. d. Harper decided to take a vacation in Bermuda rather than invest in stocks after the tax rate on capital gains was increased.