If Firms Are More Pessimistic and Believe That Future Profits

question 276

Multiple Choice

If firms are more pessimistic and believe that future profits will fall and remain weak 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 and then fall.
• E)investment spending growth smoothly.

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Definitions:

Unstated Premise

An implicit assumption or belief that is not explicitly expressed but is necessary for an argument's conclusion to hold.

Enthymeme

An argument in which a premise or conclusion is not explicitly stated but rather implied.

Validity

In logic, the characteristic of an argument or statement where it is impossible for the premises to be true and the conclusion false.

Unstated Premise

An implicit assumption within an argument that is not explicitly expressed but is required for the argument's logic to hold.