Heuristics Are Useful Mental Shortcuts but They Also Have Drawbacks

question 100

Multiple Choice

Heuristics are useful mental shortcuts but they also have drawbacks.What could be considered one disadvantage of using the availability heuristic?

• A) People may give less weight to higher probability events compared with more vivid or scarier lower probability events.
• B) Using the availability heuristic results in greater use of the base rate.
• C) When using the availability heuristic people do not consider information about an individual's personality
• D) The availability heuristic takes a great deal of controlled processing.

Describe the steps in the accounting cycle.

Calculate and interpret the current ratio.

Understand the classification and matching of terms with their definitions.

Explain the necessity of closing books at the end of an accounting period.

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Definitions:

Bonds

Fixed-income securities issued by corporations, municipalities, or governments to finance projects or operations, representing a loan made by an investor to the issuer.

Lenders

Individuals or institutions that provide funds to borrowers under the expectation of being repaid with interest.

Borrowers

Borrowers are individuals or entities that take loans from lenders, with the promise of repaying the loan amount along with interest after a specified duration.

Closed Economy

An economic system that does not interact with other economies in terms of trade, investment, or migration and relies solely on its own resources and internal production.