The Public Might Think the Economic Situation Is Not as Bad

question 180

Multiple Choice

The public might think the economic situation is not as bad as it really is if the government reported employment at 88 percent, rather than saying that the unemployment rate is 18 percent. Which of the following factors is influencing the public's judgment in this situation?

• A) a confirmation bias
• B) framing effects
• C) mental set
• D) the availability heuristic

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Definitions:

Price Floor

A government or group-imposed price control that sets the lowest legal price a commodity can be sold at. It is used to ensure producers receive a minimum price often in agriculture.

Shortage/Surplus

Shortage occurs when demand exceeds supply, while surplus occurs when supply exceeds demand.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price level in a market.

Quantity Supplied

The quantity of a product or service suppliers are prepared to offer for sale at a specific price.