You Are Trying to Decide Whether It Will Rain Tomorrow

question 3

Multiple Choice

You are trying to decide whether it will rain tomorrow, based on how many rainy days you remember from the last week. Which heuristic are you using?

• A) Availability
• B) Crystal-ball technique
• C) Anchoring and adjustment
• D) Representativeness

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Definitions:

Federal Tax Structure

The system by which the U.S. government finances its operations through the imposition of taxes on individuals, corporations, and other entities, including income tax, corporate tax, and sales tax.

Average Tax Rate

The ratio of the total amount of taxes paid to the total income of the taxpayer, showing the percentage of income paid in taxes.

Regressive

Pertaining to a tax system where the tax rate decreases as the taxable amount increases, placing a higher burden on lower-income individuals.

Personal Income Tax Revenue

The income generated by the government through the taxation of individuals' earnings.