Tobin's q theory adds to neoclassical theory because it ________. ...

[folubunmi]

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

Question 2

The IS curve is Y = 20 - 1.5r, and the aggregate demand curve is Y = 15.5 - 0.3. When the interest rate is 7 percent, the inflation rate is ________ percent.
 
  A) 14.6
  B) 9.5
  C) 3.6
  D) 20
  E) none of the above

[orangecrush]

Answer to Question 1

B

Answer to Question 2

D

[folubunmi]

Excellent

[kswal303]

Gracias!