Which of the Following Statements Best Illustrates the Fallacy of Composition

question 31

Multiple Choice

Which of the following statements best illustrates the fallacy of composition?

• A) the error of omitting relevant variables from an economic model
• B) the error of confusing normative economics with positive economics
• C) the error of generalizing from the individual to the whole
• D) the error of confusing correlation with causation

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Definitions:

Chart of Accounts

A systematic listing of all ledger account titles and numbers used in a company's accounting system.

Income Account

An account used in accounting to track revenue or income generated by a business or individual over a period of time.

Rent Expense

An account representing the cost incurred from renting premises, equipment, or other assets for business operations over a specific period.

Interest Revenue

Income earned from lending money or through investments in interest-bearing assets.