Question

question 1 of 14
in behavioral economics, what is a heuristic?
select an answer from the options below:
a a financial strategy to increase savings
b a mental shortcut used for decision-making
c an investment in technology stocks
d another word for cognitive bias

Explanation:

In behavioral economics, a heuristic is defined as a mental shortcut or rule of thumb that people use to simplify decision-making, as it reduces the cognitive load of complex choices. The other options do not match this definition: Option A refers to a savings strategy, Option C is an investment type, and Option D incorrectly equates heuristics to cognitive biases (heuristics can lead to biases but are not the same as biases).

Answer:

B. A mental shortcut used for decision-making