You Are Planning on Starting Your Own Business in 18

question 94

Multiple Choice

You are planning on starting your own business in 18 months and you intend to purchase a new home.You have looked carefully at your budget and have determined that you can afford a PITI of $900 per month.Your banker has told you that you can easily qualify for a PITI of $1,150 per month.Which of the following is the most reasonable explanation for this discrepancy?

• A)Your banker knows you really would be happier in a more expensive house.
• B)Your banker is not aware of your other long-term financial goals.
• C)Your banker's number is more accurate than your number.
• D)None of the above is a reasonable explanation.

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Definitions:

Fundamental Attribution Error

The tendency to attribute others' behaviors to their character or personality, while underestimating situational factors.

Dispositional Causes

Attributes an individual's behavior to their internal characteristics or personality traits rather than external environmental factors.

Situational Attributions

Situational attributions refer to the process of ascribing the cause of an individual's behavior to external factors, circumstances, or situations.

Fundamental Attribution Error

The tendency for individuals to overemphasize personality-based explanations for behaviors observed in others while underestimating the influence of situational factors.