Which of the Following Best Illustrates the Fallacy of Composition

question 7

Multiple Choice

Which of the following best illustrates the fallacy of composition?

• A) If Mr. Johnson had more money, he could afford to buy more goods.
• B) If Ms. Dawes stood up at a basketball game, she could get a better view of the game; if everyone stood up at a basketball game, everyone could have a better view of the game.
• C) If the price of bread rose, consumers would buy less; if consumers bought less bread, the price of bread would rise.
• D) High housing prices cause people to buy less housing, but an increase in income might cause them to buy more housing.

Distinguish between nondiscretionary and discretionary fiscal policy and their respective roles in economic management.

Comprehend the significance of correctly balancing the federal budget and its implications for the national debt.

Understand the relationship between fiscal policy decisions (expenditures and tax policies) and their impacts on recessionary or inflationary gaps.

Understand the difference between programmed and nonprogrammed decisions.

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Definitions:

Dependent Variable

A variable in scientific research or statistical modeling whose value is subject to change based on the changes in another variable, known as the independent variable.

Independent Variable

A variable that is manipulated or changed to observe its effect on a dependent variable.

Sample Correlation Coefficient

A measure that indicates the extent to which two variables change together in a sample.

Dependent Variable

A variable in an experiment or model that is expected to change in response to manipulations of the independent variable(s).