Which of the Following Individuals Would Be Most Negatively Affected

question 19

Multiple Choice

Which of the following individuals would be most negatively affected by 'anticipated inflation'?

• A)A retired railway engineer who receives a fixed income payment every month.
• B)A union contractor whose pay is adjusted based on changes in the CPI.
• C)A full-time employee at a pizza shop who earns more than the minimum wage.
• D)A student who borrows $10 000 at a nominal interest rate of 5% to finance educational expenses.

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Definitions:

Representativeness Heuristic

A cognitive shortcut that involves judging the probability of an event by its similarity to a prototype.

Cognitive Map

A mental representation of one's physical environment, helping individuals navigate and understand spatial information.

Algorithm

A step-by-step procedure or formula for solving a problem or completing a task in a finite number of steps.

Base-Rate Information

Statistical information about the frequency or prevalence of a phenomenon, event, or characteristic within a given population.