If Firms Are Less Optimistic That Future Profits Will Rise

question 96

Multiple Choice

If firms are less optimistic that future profits will rise and remain strong for the next few years, then:

• A)investment spending will fall.
• B)investment spending will rise.
• C)investment spending will remain unaffected.
• D)investment spending will rise at first, then fall.

---

Definitions:

Reinforcement

A principle in behavioral psychology where an outcome or consequence of a behavior increases the likelihood of that behavior occurring again in the future.

Decreases

A reduction in size, quantity, or degree.

Punishment

A consequence imposed for breaking a rule or law, intended to discourage the behavior.

Operant Responding

A technique of teaching that involves giving rewards for good behavior and punishments for bad behavior.