​Exhibit 3-10 -Refer to Exhibit 3-10. If Points a and B Indicate

question 90

Multiple Choice

​Exhibit 3-10
-Refer to Exhibit 3-10. If Points A and B indicate consumption goods and capital goods for two different economies, other things held constant, which of the economies is likely to grow more rapidly?

• A)​Economy A
• B)​Economy B
• C)​The two economies will grow at the same rate because they are on the same production possibilities curve.
• D)​How fast either economy grows is uncertain since growth is not influenced by either consumption or investment.

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Definitions:

Judgment

The ability to make considered decisions or come to sensible conclusions based on a comprehensive analysis of available information.

Association Heuristic

A mental shortcut that relies on the immediate connections between two concepts or objects in the mind to make a decision or solve a problem.

Error

A mistake or discrepancy from accuracy or correctness in reasoning, action, or calculation.

Judgment

The skill to arrive at well-thought-out decisions or logical conclusions.