Daniel Kahneman's Mode of Thought Referred to as System 1

question 2

Multiple Choice

Daniel Kahneman's mode of thought referred to as System 1 can be described as

• A)a calculating, conscious way of thinking.
• B)an automatic, nonconscious way of thinking.
• C)a systematic, effortful way of thinking.
• D)a calculating, complex way of thinking.
• E)a slow, controlled way of thinking.

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Definitions:

Money Supply

The combined total of all monetary resources in an economy at a designated time, including cash, coins, and balances in checking and savings accounts.

Velocity

The rate at which money is exchanged from one transaction to another, and how much money is used for purchasing goods and services within a certain period.

Quantity Equation

An equation that relates the quantity of money in an economy to the nominal value of transactions, used in economics to describe the relationship between money supply and price level.

Price Level

A measure of the average prices of goods and services in an economy at a specific time.