Don is convinced that it would be best if the U.S. was on a gold standard. He enthusiastically reads any editorials or articles that confirm his view. He frequently dismisses editorials and articles that argue against the gold standard because he
presumes they are flawed or written by "crackpots.". Don's behavior most clearly illustrates which of the following systematic mistakes that people make?
a. people are overconfident
b. people give too much weight to a small number of vivid observations
c. people are reluctant to change their minds
d. All of the above are correct.
Answer: c
You might also like to view...
Firms often seek to borrow money to expand their capital stock, and the price they pay for that money is the interest rate. What happens to the demand for money if the interest rate increases?
A. It increases. B. It decreases. C. It does not change. D. The quantity of money demanded will increase.
The level of real GDP identified by the long-run aggregate supply curve is
A) the level of GDP at which each industry is experiencing growth in sales. B) the level of GDP at which each business firm is experiencing growth in sales. C) the level of GDP at which no one is below the poverty line. D) the full-employment level of real GDP.
If the Federal Reserve purchases newly issued government debt
A) the effect is as if the Treasury had printed money to cover the deficit. B) the effect is the same as borrowing from the public. C) the money supply decreases. D) existing money is destroyed.
The benefit of tax deferred savings accounts is_____
a. that it helps avoid some of the double taxation of saving b. that it helps taxpayers avoid bracket creep c. that it increases government tax revenue in the long run d. that it stimulates aggregate demand