One Day at Work, Pauline's Earring Fell on the Floor

question 42

Multiple Choice

One day at work, Pauline's earring fell on the floor and she was unable to find the back. To keep from losing her earing, Pauline reinserted it and used part of a pencil eraser to keep the earring in place. Using a pencil eraser as a temporary earing back showed that Pauline overcame

• A) a mental set.
• B) functional fixedness.
• C) confirmation bias.
• D) transformation bias.

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Definitions:

Money Supply

The total amount of money available in an economy at a specific time, including cash, coins, and balances held in checking and savings accounts.

Aggregate Supply

The total supply of goods and services that firms in an economy are willing and able to sell at a given overall price level in a specified time period.

Classical Economists

Economists from the 18th and 19th centuries who focused on developing theories about the functioning of markets and economies.

Recessions

Times of short-term economic downturn characterized by a decrease in commerce and industrial operations, usually recognized by a decrease in Gross Domestic Product (GDP) for two consecutive quarters.