In the late 1990s,the stock market bubble ________ the value of Tobin's q,and caused ________ in business equipment.
A)increased;underinvestment
B)increased;overinvestment
C)decreased;underinvestment
D)decreased;overinvestment

Question

Quizplus · Accepted Answer

The stock market bubble increased the value of Tobin's q, which is a measure of the ratio of the market value of a firm to the replacement cost of its assets. This increase in Tobin's q would have encouraged overinvestment in business equipment.

In the Late 1990s,the Stock Market Bubble ________ the Value