If Alexandra Deposits $1,000 from Her Paycheque into Her Chequing

question 120

Multiple Choice

If Alexandra deposits $1,000 from her paycheque into her chequing account and at the same time increases her credit card balance by $1,500,then her wealth

• A) increases by $500.
• B) increases by $1,000.
• C) increases by $2,500.
• D) decreases by $500.
• E) decreases by $1,500.

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Definitions:

Representativeness Heuristic

A cognitive shortcut where the likelihood of an object belonging to a category is assessed based on how typical the object seems of the category.

Confirmation Bias

The inclination to seek out, comprehend, prioritize, and recall facts in a manner that corroborates one's established beliefs or conjectures.

Framing Effect

A cognitive bias where people decide on options based on whether the choices are presented with positive or negative connotations.

Confirmation Bias

A cognitive bias that influences individuals to favor information or interpretations that confirm their preexisting beliefs or hypotheses.