The Confirmation Bias

question 301

Multiple Choice

The confirmation bias

• A) is the belief that the odds of a chance event increase if the event hasn't occurred recently.
• B) is the tendency to only seek information that is likely to support one's decisions and beliefs.
• C) refers to when people's belief about whether an outcome will occur changes. depending on how alternative outcomes are distributed, even though the summed probability of the alternative outcomes is held constant.
• D) refers to how decision issues are posed, and how choices are structured.

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Definitions:

Consumption

The part of personal income that is spent on goods and services rather than saved, influencing economic activity and demand.

Savings

The portion of income not spent on current expenditures or taxes, which is set aside for future use or investment.

Autonomous Consumption

Spending that does not depend on current income levels, such as basic necessities, implying that this consumption occurs even in the absence of income.

Disposable Income

represents the amount of money that households have available for spending and saving after income taxes have been accounted for.