Professor Lee Has Just Conducted an Observational Study Looking at the Types

question 148

Multiple Choice

Professor Lee has just conducted an observational study looking at the types of cars driven by students versus professors. He notes that professors tend to drive more expensive cars and concludes that they are more likely in a position to afford them. Professor Lee has come to this conclusion through

• A)the use of an algorithm
• B)the use of heuristics
• C)propositional thought
• D)deductive reasoning
• E)inductive reasoning

---

Definitions:

Closed Economy

An economic system that does not engage in international trade, relying solely on its own internal markets.

Taxes Minus Transfers

The net fiscal contribution of an individual or sector, calculated by subtracting government transfers received from taxes paid.

Private Saving

The portion of individuals' or households' income that is not used for consumption or paying taxes and is instead saved.

Closed Economy

An economic system that does not engage in international trade but relies entirely on its own resources and production.