Tobin's Q Theory Adds to Neoclassical Theory Because It ________

question 55

Multiple Choice

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

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Definitions:

Just World Hypothesis

The belief that the world is fundamentally fair, leading individuals to rationalize an unjust situation as having been deserved by the victim.

Fundamental Attribution Error

The inclination to place undue importance on individual traits while overlooking the influence of environmental contexts when evaluating the actions of others.

Conditioned Taste Aversions

A learned association between a specific taste and illness or discomfort, leading to an aversion of that taste in the future.

Systematic Desensitization

A behavioral therapy technique used to reduce phobic disorders by gradually exposing the subject to the anxiety source or its context without any danger, in order to overcome the anxiety.