Final answer:
Mr. James is suffering from a delusion, which is a fixed false belief not based on reality. It is different from hallucination, compulsion, and obsession. Delusions can be symptomatic of psychiatric disorders or brain dysfunction.
Step-by-step explanation:
Mr. James's belief that FBI agents are trying to steal his savings, even though it's not based on reality, is known as a delusion. A delusion is a fixed false belief that is resistant to reason or confrontation with actual fact. In this case, Mr. James does not have a hallucination since he is not experiencing sensory perceptions that aren't there. Rather, he has a strong, incorrect belief, which does not involve sensory experiences but is rather a cognitive error. A compulsion is repetitive behavior driven by the need to reduce anxiety, which does not apply here, and an obsession is a persistent thought or impulse, which can be related to a delusion but is not the same. Delusions can be a symptom of a psychiatric disorder, such as schizophrenia, or can be due to brain malfunctioning or chemical imbalances in the brain.