Which of the Following Statements Is NOT Correct

question 65

Multiple Choice

Which of the following statements is NOT correct?

• A)Interest compensates lenders for the use of their money.
• B)Interest is a penalty for borrowers for wanting to consume before earning income.
• C)Interest is set by the operator of the financial market in which the financial instrument is issued.
• D)Interest is set by the supply and demand for funds.

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Definitions:

Fundamental Attribution Error

The tendency to overemphasize personality-based explanations for behaviors observed in others while underestimating the influence of situational factors.

Situational Causes

External environmental factors or conditions that influence an individual's behavior or outcomes, as opposed to intrinsic or internal factors.

Personal Causes

Factors or reasons stemming from individual characteristics or actions that lead to a specific effect or outcome.

Out-group Bias

The tendency to have negative perceptions or feelings towards individuals who are not considered part of one's own group, leading to prejudice and discrimination.