According to Tobin's Q Theory,when Equity Prices Are Low the Market

question 12

Multiple Choice

According to Tobin's q theory,when equity prices are low the market price of existing capital is ________ relative to new capital,so expenditure on fixed investment is ________.

• A)cheap;low
• B)dear;low
• C)cheap;high
• D)dear;high

Identify factors affecting price elasticity of supply and demand.

Determine the effect of income changes on the demand for goods (normal and inferior goods).

Understand the concept and calculation of cross elasticity of demand.

Apply the midpoint formula to calculate elasticity.

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