Explain Why Consumption Is Less Volatile Than Investment

question 16

Essay

Explain why consumption is less volatile than investment.

---

Definitions:

Improbable Events

Improbable events are occurrences with a low likelihood of happening, often surprising or unforeseen due to their rarity.

Confirmation Bias

The proclivity to pursue, decode, cherish, and memorize information that reinforces one's preconceived beliefs or assumptions.

Misdiagnosis

The act of incorrectly identifying a disease or condition, leading to potential delay in appropriate treatment or unnecessary anxiety.

Belief Perseverance

The tendency to maintain one's belief even after it has been discredited or proven wrong.