If Accurate Judgments Are Our Goal, We Should Use Base

question 41

Multiple Choice

If accurate judgments are our goal, we should use base rate information instead of the representativeness heuristic when __________.

• A) we lack specific information about the person
• B) base rates are high in the sample
• C) base rates are low in the sample
• D) the decision is a complicated one

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Definitions:

Interest Rates

The fee, shown as a proportion of the total loan amount, that a lender demands from a borrower for the use of their funds.

Index Funds

Investment funds that replicate the performance of a specific financial market index, aiming at broad market exposure with low operating expenses.

Financial Intermediaries

Institutions that channel the savings of individuals, businesses, and governments into loans or investments.

Municipal Bonds

Municipal Bonds are debt securities issued by municipalities to finance public projects such as roads, schools, and infrastructure, offering investors tax-exempt interest payments.