Believing we'll surely have more money next year,we take out loans or buy on credit.This best illustrates
A) confirmation bias.
B) the planning fallacy.
C) belief perseverance.
D) the framing effect.

Question

Quizplus · Accepted Answer

The planning fallacy refers to the tendency to underestimate the time, costs, and resources required to complete a project or achieve a goal. In this scenario, the planning fallacy explains why we may take out loans or buy on credit, believing that we will have more money in the future to pay them off. We assume that our financial situation will improve, but we may not have considered all the factors that could affect it.

Believing We'll Surely Have More Money Next Year,we Take Out