Initially, Policy Makers Were Not Concerned About the Financial Crisis

question 90

Multiple Choice

Initially, policy makers were not concerned about the financial crisis because:

• A)conventional economic theory was telling them they did not have to worry about such an event occurring.
• B)no other comparable crisis had happened before in history.
• C)fiscal policy would kick in to stabilize the economy.
• D)banks and other financial institutions had convinced policy makers that they would take care of any type of crisis.

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Definitions:

Fundamental Attribution Error

The tendency to overestimate the influence of personality and underestimate the impact of situational factors in explaining someone else's behavior.

Projection

A defense mechanism where an individual attributes their own unacceptable thoughts or feelings onto someone else.

Consensus Cue

A signal or piece of information indicating that a group is reaching or has reached general agreement on a particular issue.

Distinctiveness

The quality of being different or unique, distinguishing an individual, group, or object from others in a specific context or among comparable entities.