Assume That Statistics Canada Reports That Inflation Is Becoming a Problem.What

question 73

Multiple Choice

Assume that Statistics Canada reports that inflation is becoming a problem.What should the government do in order to reduce inflation?

• A) Lower taxes.
• B) Raise taxes.
• C) Increase government spending.
• D) Encourage consumers to increase spending.
• E) The government should increase spending and lower taxes.

---

Definitions:

Perceptual Distortion

An error in how we interpret or understand sensory information, causing us to misjudge part of our environment or social interactions.

Primacy Effect

A cognitive bias that results in a person recalling information presented at the beginning of a list better than information in the middle or end.

Selective Attention

The cognitive process of focusing on a particular object, event, or process while ignoring others, in a limited capacity of awareness.

Contrast Effect

A cognitive bias where the difference between two things is exaggerated because they are compared directly to each other.