Just as Would Be Predicted by a Forward-Looking Theory of Investment

question 2

Multiple Choice

Just as would be predicted by a forward-looking theory of investment, response to the Tax Reform Act of 1986 included

• A) an increase in investment in business equipment in the first quarter of 1986 after a reduction of similar magnitude in the last quarter of 1985.
• B) an increase in investment in business equipment appearing suddenly in January 1986.
• C) a reduction in investment in business equipment in the first quarter of 1986 after an increase of similar magnitude in the last quarter of 1985.
• D) a reduction in investment in business equipment appearing suddenly in January 1986.
• E) almost no change in investment in business equipment either late in 1985 or early in 1986.

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.