A Sudden Increase in Household Wealth Is an Example of a ______

question 36

Multiple Choice

A sudden increase in household wealth is an example of a ______ demand shock, which would shift the AD curve to the ______.

• A) negative; left
• B) positive; left
• C) negative; right
• D) positive; right

Recognize and describe common cognitive biases and heuristics, such as confirmation bias and representativeness heuristic.

Differentiate between reasoning, judgment, problem solving, and decision making in cognitive processes.

Identify factors that influence the likelihood of engaging in System II thinking.

Analyze the impact of cognitive biases on judgment and decision-making.

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Definitions:

William H. Sahlman

A prominent professor at Harvard Business School known for his work on entrepreneurship and venture capital.

Entrepreneurs

Individuals who initiate, manage, and assume the risks of starting and operating a new business venture.

Accountants

Accountants are professionals responsible for managing and reviewing financial information, ensuring accuracy, and compliance with laws and regulations, often aiding in financial planning and decision-making.

Business Ethicists

Scholars or professionals who study and advise on ethical practices and moral dilemmas in business environments.