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Ahmed Is Working and Is Spending More Than He Is

question 42

Multiple Choice

Ahmed is working and is spending more than he is earning by using his savings to make up the difference. Which of the following statements is true?


Definitions:

Behavioral Economists

Scholars who study the psychological, social, cognitive, and emotional factors affecting the economic decisions of individuals and institutions.

Status Quo Bias

The tendency most people have when making choices to select any option that is presented as the default (status quo) option. Explainable by prospect theory and loss aversion.

Anchoring

A cognitive bias in decision-making where individuals rely too heavily on an initial piece of information (the "anchor") when making judgments.

Minimum Payments

The smallest amount of a debt that must be paid each period, often used in the context of credit card debt or loans to avoid penalties.

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