In Response to the Destructive Bank Panics of the Great

question 158

Multiple Choice

In response to the destructive bank panics of the Great Depression,future bank panics are designed to be prevented by

• A)the Federal Reserve System conducting open market operations.
• B)the establishment of the Federal Deposit Insurance Corporation.
• C)establishing a fractional reserve system of banking.
• D)increasing the required reserve ratio to 100%.

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Definitions:

Framing

The way information is presented or communicated, which influences how it is perceived and interpreted.

Anchoring Effect

A cognitive bias where individuals rely too heavily on an initial piece of information (the "anchor") when making decisions.

Sunk Costs

Costs that have already been incurred and cannot be recovered, and should not affect future decision-making processes.

Discrimination Learning

A cognitive process where an organism learns to respond differently to various stimuli because they are associated with different outcomes.