You Observe That When Stock Prices Rise, Interest Rates Soon

question 242

Multiple Choice

You observe that when stock prices rise, interest rates soon fall, and therefore conclude that higher stock prices lead to lower interest rates. This would be an example of

• A) the fallacy of composition.
• B) trade-off among economic goals.
• C) the post hoc fallacy.
• D) the use of loaded terminology.

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Definitions:

Superego

In psychoanalytic theory, the part of the personality that acts as a moral center, enforcing ethical conduct and striving for perfection.

Psychological Development

The changes in cognitive, emotional, and social capabilities and behaviors across the lifespan, influenced by a mixture of genetic and environmental factors.

Defense Mechanism

Psychological strategies used unconsciously by individuals to protect themselves from anxiety and to manage emotional conflict and internal or external stressors.

Repression

A defense mechanism in psychoanalytic theory where unpleasant thoughts, memories, or desires are excluded from conscious awareness.