It Is Possible for an Increase in Government Spending to Encourage

question 367

True/False

It is possible for an increase in government spending to encourage, instead of crowding out, private
investment.

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Definitions:

Representativeness Heuristic

A mental shortcut people use where the likelihood of an object belonging to a particular category is assessed based on how typical that object is thought to be of the category.

Availability Heuristic

A cognitive bias that causes people to overestimate the likelihood of events based on their ability to recall similar instances.

Escalation Heuristic

A cognitive bias or decision-making process where individuals increase their commitment to a previously taken course of action beyond the level that is justified by the current situation.

Satisficing Heuristic

A decision-making strategy that involves searching through the available alternatives until an acceptability threshold is met, rather than seeking the best possible solution.