An Identity Is an Equation That

question 55

Multiple Choice

An identity is an equation that

• A)describes an equilibrium.
• B)pertains to macroeconomics,not to microeconomics.
• C)must be true because of how the variables in the equation are defined.
• D)involves final goods,not intermediate goods.

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Definitions:

Confirmation Bias

The tendency to focus on information relevant to a belief and ignoring or downplaying information that is inconsistent with that belief.

Anchoring and Adjustment

A cognitive bias where individuals rely too heavily on an initial piece of information (the "anchor") when making decisions, with adjustments made too conservatively.

Representativeness

A cognitive heuristic where an individual judges the probability or frequency of an event by how much the event resembles the typical case.

Availability

The state of being able to be used or obtained; accessibility.