If the Interest Rate Decreases

question 15

Multiple Choice

If the interest rate decreases

• A)or if the price level increases,then people will want to hold more money.
• B)or if the price level increases,then people will want to hold less money.
• C)or if the price level decreases,then people will want to hold more money.
• D)or if the price level decreases,then people will want to hold less money.

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Definitions:

Overconfidence

A cognitive bias referring to an individual's inflated belief in their own abilities or outcomes.

Linguistic Determinism

Whorf’s hypothesis that language determines the way we think.

Heuristic

is a mental shortcut that allows people to solve problems and make judgments quickly and efficiently, often based on previous experiences.

Confirmation Bias

The tendency to search for, interpret, favor, and recall information in a way that confirms one’s preexisting beliefs or hypotheses, while giving disproportionately less consideration to alternative possibilities.