To the Extent That Firms Base Investment Decisions on Current

question 3

Multiple Choice

To the extent that firms base investment decisions on current profits,

• A) Tobin's q theory is supported
• B) investment spending tends to destabilize the economy
• C) resources are efficiently allocated
• D) the hypothesis that available cash flow drives investment is rejected
• E) taxes, depreciation, and interest rates are irrelevant

---

Definitions:

Escape Learning

A form of learning in which the subject acquires a response that results in the termination of an aversive stimulus.

Punishment

A form of behavioral control involving the application of an unpleasant stimulus or removal of a pleasant stimulus in response to undesired behavior.

Positive Reinforcement

A technique in behavior modification that involves rewarding desirable behaviors, thereby increasing the likelihood of their recurrence.

Variable Interval Schedule

A reinforcement schedule where rewards are provided after an unpredictable time interval, leading to more consistent behavior.