Which of the Following Does Not Explain Why the Glass-Steagall

question 4

Multiple Choice

Which of the following does not explain why the Glass-Steagall regulations lost their effectiveness?

• A)Over time, nonbank financial firms were able to borrow directly from the public, rather than having to borrow from commercial banks.
• B)The Federal Reserve created regulations that ran counter to what the government was trying to do.
• C)With the advent of new financial instruments, regulated banks lost business to unregulated institutions, and credit began to flow through unregulated systems.
• D)As regulations became too successful, people wanted to eliminate these regulations in order to pursue the magic of the free market.

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Definitions:

Escalation of Commitment

Escalation of commitment refers to the phenomenon where individuals or groups continue to invest in a decision or project despite evidence of its ineffectiveness or failure, often due to cognitive biases.

Avoiding Trap

A decision-making error where individuals choose to evade or postpone decisions to avoid conflict or mistakes.

Determine Right Course of Action

The process of making decisions that align with one’s ethics, goals, and the available information to achieve the best outcome.

Work Process Strength

The efficiency, effectiveness, and adaptability of processes within a workplace that contribute to achieving organizational goals.