Carol Judges the Probability of Category Membership by How Well

question 136

Multiple Choice

Carol judges the probability of category membership by how well an object resembles a category. Carol is doing which of the following?

• A) using the representativeness heuristic
• B) committing the conjunction fallacy
• C) committing the gambler's fallacy
• D) using the availability heuristic

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Definitions:

Significant Loss

A substantial reduction in the value of an asset or a large financial deficit experienced by an individual or entity.

Required Reserve Ratio

The fraction of deposits that banks are legally required to keep as reserves, either in their vaults or with the central bank.

Money Supply

The aggregate volume of currency resources present in an economy at any given time, covering cash, coins, and the funds in checking and savings accounts.

Fed

Short for the Federal Reserve System, which is the central banking system of the United States responsible for monetary policy.