People who have recently become unemployed often believe the national unemployment rate is higher than it actually is.Behavioral economists would attribute this to

A) the anchoring effect.
B) the law of small numbers.
C) time inconsistency of preferences.
D) fairness norms.
E) hyperbolic discounting.

National Unemployment Rate

A measure of the percentage of the labor force that is unemployed and actively seeking employment, often used as a key indicator of the health of a country's economy.

Anchoring Effect

A cognitive bias where an individual's decisions are influenced by a particular reference point or "anchor," sometimes leading to irrational decision-making.

Behavioral Economists

Specialists in an area of economics that combines insights from psychological research with economic theory to better understand decision-making processes.