The concept of loss aversion is:
A. a general tendency for people to put more effort into achieving gains than avoiding losses.
B. preferring certain outcomes over uncertain ones.
C. a general tendency for people to put more effort into avoiding losses than achieving gains.
D. a spectrum of tolerance for risky situations.
Answer: C
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According to the new Keynesian theory, the widespread importance of small menu costs results in variations in aggregate demand causing both
A) smaller short-run adjustments in real GDP and immediate adjustment in the price level. B) smaller short-run adjustments in real GDP and delayed adjustment in the price level. C) greater short-run adjustments in the real GDP and immediate adjustment in the price level. D) greater short-run adjustments in real GDP and delayed adjustment in the price level.
During the colonial period, regulation of business activities was the right of government and its duty—extensive regulation was done, such as licensing, inspection, price fixing, etc
Which statement best describes regulation in the decades after 1789? (a) Regulation continued at about the same level as during the colonial period. (b) As commerce and manufacturing became more complex, the old police-power controls by detailed inspection became increasingly difficult to maintain and many controls were abolished by the states. (c) Because the economy was becoming more complicated, the task of regulation shifted to the federal government. (d) Regulation was abandoned because it was inconsistent with property rights guaranteed by the Constitution.