Heuristics

question 294

Multiple Choice

Heuristics

• A)are rules of thumb that generate decisions that generally maximize net benefits.
• B)take a long time to develop and are therefore avoided by rational decision makers.
• C)are shortcuts that save time and energy in decision making.
• D)always waste mental resources by leading people to suboptimal outcomes.

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Definitions:

Future Optimism

A psychological state or economic theory that anticipates positive outcomes and growth in the future.

Rising Prices

Rising prices refer to the phenomenon where the general level of prices for goods and services in an economy increases over time, often indicative of inflationary pressures.

Investment Tax Credit

Investment tax credit is a tax incentive that reduces the tax liability of businesses for specific investments in assets or projects, encouraging capital investment.

Aggregate Supply

The total amount of goods and services that producers are willing and able to supply at different price levels in an economy over a specific time period.