Which of the Following Statements Is True of the Impact

question 29

Multiple Choice

Which of the following statements is true of the impact of the economic recession on consumers' mindset?

• A) A majority of consumers have started to act on impulse and buy whatever they desire to buy.
• B) Consumers have begun to reevaluate their paradigm or the way they look at products.
• C) A large number of consumers are opting to buy rather than rent homes, cars, and clothes.
• D) Consumers have begun to shift from a cautious spending approach to a cutting back mentality.

---

Definitions:

Rational Decisions

Decisions that are made based on logical reasoning from available information, aiming to maximize the outcome or benefit.

Confirmation Bias

The tendency to search for, interpret, favor, and recall information in a way that confirms one’s preexisting beliefs or hypotheses.

Dictator Game

A mutually anonymous behavioral economics game in which one person (“the dictator”) unilaterally determines how to split an amount of money with the second player.

Ultimatum Game

A behavioral economics game in which a mutually anonymous pair of players interact to determine how an amount of money is to be split. The first player suggests a division. The second player either accepts that proposal (in which case the split is made accordingly) or rejects it (in which case neither player gets anything).