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Listen to an Announcement Test #154
Listen to an Announcement
1. What is the professor's main purpose?
A) To critique traditional economic theories
B) To assign a new research project
C) To introduce the concept of behavioral economics
D) To discuss the psychology of investing
2. What is a key idea in behavioral economics?
A) People always make logical financial choices.
B) Economic decisions are unaffected by psychology.
C) Emotional factors can influence spending.
D) Gaining money is more satisfying than losing it.
Professor: Alright, class, let's begin. Today we're moving into a new topic: behavioral economics. Unlike traditional economics, which assumes people make perfectly rational decisions, behavioral economics incorporates insights from psychology. It studies how emotional and cognitive factors influence our financial choices. A classic example is 'loss aversion,' the idea that people feel the pain of a loss more strongly than the pleasure of an equivalent gain. We'll explore this and other concepts throughout the week.
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