What Is the Fiscal Cliff and How Did It Affect

question 9

Essay

What is the fiscal cliff and how did it affect the United States?

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Definitions:

Cost-benefit Impact

An assessment that compares the costs involved in an action to the benefits derived from it, used to determine its overall value and feasibility.

Escalating Cost Impact

The effect of costs increasing over time, often spiraling beyond original estimates, generally due to poor planning, scope creep, or unforeseen circumstances.

Satisficing

A decision-making strategy that involves searching for and choosing an acceptable or satisfactory response to a problem or scenario, rather than an optimal solution.

Anchoring and Adjustment Heuristic

A cognitive bias that describes the common human tendency to rely too heavily on the first piece of information offered (the "anchor") when making decisions.