A Single,memorable Case of Welfare Fraud Can Have a Greater

question 60

Multiple Choice

A single,memorable case of welfare fraud can have a greater impact on people's estimates of welfare abuse than do statistics showing that this case is actually the exception to the rule. This illustrates that judgments are influenced by the

• A)confirmation bias.
• B)representativeness heuristic.
• C)belief perseverance phenomenon.
• D)availability heuristic.

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Definitions:

Face Value

(1) The amount paid at maturity of a Treasury bill or commercial paper. (2) The initial principal amount of a mortgage.

Market Value

The current price at which an asset or service can be bought or sold in the marketplace.

Compounded Monthly

A method of calculating interest where the accrued interest is added to the principal sum each month, leading to interest on interest.

Compounded Annually

Interest on an investment or loan calculated once per year, adding to the principal for the next year's interest calculation.