The Natural Tendency for People to Be Influenced by an Initial

question 43

Multiple Choice

The natural tendency for people to be influenced by an initial anchor point such that they do not sufficiently move away from that point as new information is provided refers to:

• A)insufficient heuristic.
• B)anchoring and adjustment heuristic.
• C)anchoring and information deficiency heuristiC.
• D)representativeness heuristic.
• E)obtuseness.

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Definitions:

Excess Reserves

The reserves banks hold over and above the legal requirement set by the central bank, often seen as a precautionary measure.

Individual Bank

An individual bank refers to a financial institution dealing with deposits and loans of consumers and businesses, distinguishing itself by offering personalized banking products and services.

Depression

An intense and extended period of economic recession marked by a substantial drop in Gross Domestic Product (GDP), elevated rates of joblessness, and a decrease in the general price level of goods and services.

Aggregate Demand

The aggregate requirement for all products and services within an economy, measured at a specific overall price level and during a certain time frame.