Underestimating the Influence of External Factors and Overestimating the Influence

question 126

Multiple Choice

Underestimating the influence of external factors and overestimating the influence of internal factors when making judgments about others is known as the ________.

• A) fundamental attribution error
• B) self-serving bias
• C) locus of control error
• D) halo effect

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Definitions:

Federal Budget

An annual financial statement presenting the government's proposed revenues and spending for a fiscal year.

Crowds Out

Refers to the effect where increased government spending and borrowing reduce private investment in the markets.

Fiscal Policy

Governmental adjustments of its spending levels and tax rates to influence a nation's economy.

Financial Market

The marketplace where buyers and sellers interact to trade financial instruments, such as stocks, bonds, currencies, and derivatives, often within an institutional framework.