You and a Friend Are Visiting a New City and Would

question 40

Multiple Choice

You and a friend are visiting a new city and would like to splurge and go out for a fine meal. You look at the restaurant listings in the newspaper and find one that is very expensive. Your friend says: "Let's go for it. With prices like that, we're bound to have a delicious meal!" In making this statement, your friend was most likely guided by the ____.

• A)vacation effect
• B)representativeness heuristic
• C)contrast effect
• D)primacy effect

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Definitions:

Greenbacks

A term historically used to refer to paper currency issued by the United States during the Civil War, recognized by their green coloring.

Gold Standard

A monetary system in which the value of a country's currency is directly linked to gold, ensuring stability and trust in the currency.

Time Deposits

A financial product provided by banks that offers a higher interest rate in exchange for keeping a specified amount of money untouched for a predetermined period.

Reserve Requirement

The minimum percentage of customer deposits and notes that a bank must hold as reserves rather than lending out, as mandated by the central bank.