People Often Assume That It Is Necessary to Use All

question 112

Multiple Choice

People often assume that it is necessary to use all the numerical information provided in a problem in order to solve the problem. In reality, numerical information sometimes makes it more difficult to solve a problem. Why?

• A)The information results in a mental set.
• B)The information may be irrelevant.
• C)The information puts unnecessary constraints on the problem solver.
• D)The information encourages functional fixedness.

---

Definitions:

Potential Output

The maximum output an economy can produce without causing inflation when all resources are fully employed.

Aggregate Demand Curve

A curve that illustrates the total demand for all goods and services in an economy at various price levels, assuming all other factors remain constant.

Short-Run Aggregate Supply Curve

A curve depicting the relationship between the total supply of goods and services produced by a country and the price level for that output in the short term, taking some input prices as fixed.

Treasury Securities

Debt instruments issued by a government to finance its spending, offering a safe investment option with a guaranteed rate of return.