During Recessions, Investment Spending Usually Decreases Because

question 44

Multiple Choice

During recessions, investment spending usually decreases because:

• A) the real interest rate falls.
• B) lower profits mean more firms face financing constraints.
• C) the purchase price of capital decreases.
• D) corporate tax rates usually decrease.

---

Definitions:

Management Function

The activities undertaken by managers in planning, organizing, leading, and controlling to achieve organizational goals.

Expensive

Referring to something that has a high cost or price, often requiring a considerable amount of money to purchase.

Hygiene Factors

Factors related to the work environment that, while not directly motivating, can lead to dissatisfaction if missing or inadequate; a concept in Herzberg's two-factor theory.

Herzberg

Refers to Frederick Herzberg, a psychologist best known for developing the Motivation-Hygiene Theory, which differentiates between factors that satisfy or dissatisfy employees in the workplace.