Northanger Abbey is an example of Impaired Judgement
Northanger Abbey is about seventeen-year-old Catherine Morland, who is finds love and romance in the books she reads and at Northanger Abbey. Most of Catherine's problems and misunderstandings in the book is due to her ineptness at reading people.
Early on the story Catherine's brother, James, meets Catherine's friend, Isabella and a relationship develops between the two. Catherine does not think much about their relationship and has no clue what Isabella is referring to when they meet one sunny day:
Isabella, embracing Catherine thus began “Yes, my dear Catherine, it is so indeed; your penetration has not deceived you. – Oh! That arch eye of yours! It sees through everything.”
Catherine replied only by a look of wondering ignorance (123).
This demonstrates Catherine's inability to judge people or situations. She did not recognize the relationship between James and Isabella, or even consider a marriage offer may be made between them but once told of the proposal, Catherine is ecstatic for her friend and assures her that her parents would approve of the match.
Later, Isabella gets a letter from John stating that they would receive a living of 400 pounds a year and could marry in 2 and a half years. Isabella does not take this news well. Catherine tries to assure her and Isabella replies with:
“It is not my own account I wish for more; but I cannot bear to be the means of injuring my dear Morland, making him sit down upon an income hardly enough to find one in the common necessaries of life. For myself, it is nothing; I never think of myself (138).”
Instead of recognizing Isabella's disappointment for what it is—not getting the money she thought she'd get through marrying her brother—Catherine accepts her reason for why she isn't happy. If Catherine had figured out the true reason for her unhappiness, she would not have been so confused when she see's Isabella dancing with Fredrick when she's engaged to James. She also could have warned her brother to try to prevent him the heartache he inevitably feels.
In that same scene, Catherine further demonstrates her ineptness at judging and understanding people when she talks to Isabella's brother, John Thorpe:
“I am glad you are no enemy to matrimony however. Did you ever hear the old song, 'Going to one wedding brings on another'? I say, you will come to Belle's wedding, I hope.”
“Yes; I have promised your sister to be with her, if possible.”
“And then you know”--twisting himself about and forcing a foolish laugh--”I say, then you know, we may try the truth of the same old song.”
“May we?--But I never sing. Well, I wish you a good journey.” (128-9)
Catherine does not catch on to the fact that John is actually asking her hand. She does not even realize he is interested in her as a potential bride. Instead she is thinking he is speaking of singing a song together with him. Because of this, Catherine does not understand Isabella's teasing over her 'engagement' with John, and is horrified when she realizes John believes them engaged. She also doesn't understand how she gave him that impression. She has no interest in marrying Isabella's brother.
Her inability to judge people and relationships does mean she is caught by surprise and often embarrassed when she realizes the true intentions of those she interacts with. Her ineptness however is realistic, creates intrigue and suspense in the story and some much-needed drama that otherwise wouldn't occur.