Researchers presented participants with two retirement savings options with identical outcomes: 'You will have 80% of your salary in retirement' versus 'You will lose 20% of your salary in retirement.' Participants rated the first option significantly more favorably despite the mathematical equivalence. The study demonstrates what psychologists call 'framing effects'—how the presentation of identical information affects decision-making.
It can be inferred from the text that
people always make purely rational financial decisions
retirement planning is unimportant to most people
mathematical equivalence guarantees similar psychological responses
the way information is presented may influence judgment independently of factual content
Correct Answer: D
Choice D is the best answer. Identical information framed differently produced different responses.
- Context clues: "Identical outcomes" but "significantly more favorable" rating for one phrasing.
- Meaning: If facts are the same but reactions differ, presentation itself affects judgment.
- Verify: The term "framing effects" names this phenomenon of presentation influencing decisions.
💡 Strategy: When identical content produces different reactions, infer that the variable that changed (presentation) is causally relevant.
Choice A is incorrect because the study shows irrational responses to framing. Choice B is incorrect because the passage addresses decision psychology, not retirement importance. Choice C is incorrect because equivalent options got different responses.