According to the bounded rationality hypothesis, an individual confronting a large number of complicated choices is most likely to respond by
A) using a simple rule of thumb to choose among a subset of easiest-to-evaluate options.
B) using the ceteris paribus assumption to assist in simplifying and examining each of the possible options.
C) utilizing readily available empirical evidence to assist in evaluating every option.
D) assessing every available choice by developing sophisticated theories regarding each option.
Answer: A
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(A) Bank presidents from Federal Reserve Districts. (B) From the Federal Advisory Council (FAC). (C) Appointed by the chair of the Board of Governors. (D) Elected by the Board of Governors.
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