Final answer:
Purchasing new machinery is not a short-run decision for a firm because it is a capital expenditure with a long-term investment horizon, whereas hiring temporary workers, increasing advertising, and renovating office space can be adjusted relatively quickly and are considered short-run decisions.
Step-by-step explanation:
In response to the question regarding which option would not be considered a short-run decision for a firm, purchasing new machinery is typically not a short-run decision. This is because buying machinery is an example of a capital expenditure that often has a useful life extending beyond the short-term period and involves significant financial commitment and planning. Hiring additional temporary workers, increasing the advertising budget, and renovating the office space are all actions that can be adjusted relatively quickly and are usually considered short-run decisions.
During a recession, firms may be cautious to make long-term investments as they assess whether demand will be sustained, opting instead for short-term solutions like overtime. Firms choose their financial capital sources based on the need to support these long-term decisions. Such significant investments are generally easier to implement in the long term, when firms can better predict and accommodate the expansion of production facilities and the hiring of additional workers.