Table 27-4
-Refer to Table 27-4. Consider the hypothetical information in the table above for potential real GDP, real GDP, and the price level in 2018 and in 2019 if Congress and the president do not use fiscal policy. If Congress and the president use fiscal policy successfully to keep real GDP at its potential level in 2019, which of the following will be lower than if Congress and the president had taken no action?
Definitions:
Stereotyping Heuristic
A mental shortcut that allows individuals to make quick judgments about people or situations based on generalizations or stereotypes.
Representation Heuristic
A cognitive shortcut in which judgments are made based on how much one thing resembles another.
Elimination by Aspect
A decision-making process where options are eliminated based on the absence of desired characteristics.
Anchoring with Adjustment
A cognitive heuristic where an individual bases their initial estimate or decision on an initial value (anchor) and makes adjustments from that point to reach a conclusion.
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