In the Midst of the Stock Market Crash of 2008

question 27

Multiple Choice

In the midst of the stock market crash of 2008 and the housing crisis, most Americans:

• A) cut back on spending, leading to business failures and a rapid rise in unemployment.
• B) bought up stock in Lehman Brothers.
• C) invested in property as housing prices increased.
• D) attempted to invest in mortgage-based securities.
• E) were confident that the economic crisis would be short-lived.

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Definitions:

Industrial Regulation

Governmental regulation of industries to ensure competition, protect consumers, and maintain ethical and safe business practices.

Regulatory Commissions

Government agencies responsible for overseeing and regulating specific industries or economic sectors to ensure fair practices and protect public interests.

Food and Drug Administration

A federal agency of the United States responsible for protecting and promoting public health through the control and supervision of food safety, tobacco products, dietary supplements, prescription and over-the-counter pharmaceutical drugs, vaccines, biopharmaceuticals, blood transfusions, medical devices, electromagnetic radiation emitting devices, cosmetics, and veterinary products.

Public Interest Theory

A theory suggesting that regulation is supplied in response to the demand of the public for the correction of inefficient or inequitable market practices.