Which of the Following Was a Surprising Aspect of the Crisis

question 31

Multiple Choice

Which of the following was a surprising aspect of the crisis to economists?

• A) Economists did not think financial crises could happen.
• B) Rational expectations are no longer a valid working assumption.
• C) The financial markets did not function efficiently and broke down.
• D) The amplification effect of a housing market shock to a financial and macroeconomic crisis.
• E) Economic agents overestimated housing prices.

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Definitions:

Fad Appeal

Marketing strategies that seek to capitalize on a trend or craze among consumers, often with products that may have short-lived popularity.

Counterfeit Beanie Babies

Fake versions of the popular Beanie Babies toys, produced without authorization to imitate the originals.

Craftsmanship

The quality of design and work shown in something made by hand; artistry.

Pricing Constraints

Limitations or restrictions that affect the pricing strategy of a company, including costs, competition, demand, and regulatory requirements.