A rise in Tobin's ratio is supposed to lead to a rise in
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JNU SSS 2016 Question 49: Consumption and investment
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A rise in Tobin's q ratio is supposed to lead to a rise in (A) consumption expenditure (B) investment expenditure (C) government expenditure (D) net export
Consumption and investment has come up 74 times in 7 exams since 2005.
What this question tests
This question is on Tobin's q and the user cost of capital, part of Consumption and investment in Macroeconomics.
Modern theories of investment based on the market value of capital and its rental cost.
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