A Rise in Interest Rates Leads To

question 2

Multiple Choice

A rise in interest rates leads to:

• A)an increase in the PDV of profits from owning a machine.
• B)a decrease in the PDV of profits from owning a machine.
• C)offsetting the effects on the costs and benefits of owning a machine.
• D)no effect on either the costs or benefits of owning a machine.

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Definitions:

Judging

Involves forming opinions or conclusions about people or situations, often without all the necessary information.

Heuristics

Mental shortcuts or rules of thumb that simplify decision making, often useful but sometimes leading to inaccuracies or biases.

Availability Heuristic

A cognitive heuristic that depends on readily accessible examples in an individual’s mind when assessing a particular topic, idea, strategy, or choice.

Improbable Dangers

Perceived threats or risks that have a very low likelihood of occurring.