You Ask Several of Your Friends to Rate the Likelihood

question 230

Multiple Choice

You ask several of your friends to rate the likelihood of the following statements: (1) There will be a flood in British Columbia, (2) There will be an earthquake in British Columbia that causes a flood. Almost all of your friends rate statement (2) as more likely. These likelihood estimates are _____________ and illustrate the use of _____________.

• A)correct; inductive reasoning
• B)incorrect; the representativeness heuristic
• C)correct; the availability heuristic
• D)incorrect; a confirmation bias

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Definitions:

Industrial Policy

A strategic effort by a government to encourage the development and growth of specific sectors or industries within the economy.

Economic Development

The process by which a nation improves the economic, political, and social well-being of its people, typically seen through increases in income, education, and health.

World Bank

A worldwide financial agency offering loans and grants aimed at funding capital improvements in less affluent nations through governmental channels.

International Monetary Fund

An international organization created to promote global economic stability and growth through financial cooperation and assistance.