Corey and Trevor Are Playing a Coin-Tossing Game Where Each

question 13

Multiple Choice

Corey and Trevor are playing a coin-tossing game where each player, in turn, tosses a fair coin consecutively ten times. The winner of the game is the player who tosses the most consecutive tails. Corey decides to go first and tosses tails five times in a row. Ricky and Julian are observing the game, and Ricky whispers the following to Julian before Corey attempts the sixth toss: "The probability of Corey tossing tails has to be greater than 75% because he is on a roll!" Ricky's statement is an example of the:

• A) Rickyism fallacy.
• B) fallacy of single cause.
• C) Sunnyvale fallacy
• D) hot-hand fallacy.
• E) gambler's fallacy.

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Definitions:

Open Economy

An economy that allows for trading and financial transactions with other countries.

Investment

Refers to the purchase of goods that are not consumed today but are used in the future to create wealth, such as purchasing machinery for a factory.

Net Capital Outflow

The difference between domestic residents’ investments abroad and foreigners’ investments in the domestic economy.

Net Exports

The value of a country's exports minus the value of its imports, reflecting the balance of trade between a country and its trading partners.