What Two Groups of Decision Makers Are Represented in the Basic

question 189

Multiple Choice

What two groups of decision makers are represented in the basic circular flow model?

• A) governments and financial institutions
• B) lenders and borrowers
• C) wholesalers and retailers
• D) bankers and regulators
• E) households and firms

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Definitions:

Availability Heuristic

The tendency to judge the probability of a type of event by how easy it is to think of examples or instances.

Probability

A measure of the likelihood that an event will occur, expressed as a number between 0 and 1.

Event

An occurrence or happening, especially one of significance, that can be observed or participated in.

Confirmation Bias

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